Delay in Mandatory Payrolling of Benefits-in-Kind
Employers and payroll professionals need to be aware that the implementation of mandatory payrolling for benefits-in-kind (BiKs) has been postponed. Originally scheduled for 6th April 2026, the new requirement will now take effect on 6th April 2027. This delay provides additional time for businesses to prepare for the transition from the current P11D reporting system to real-time payrolling.
What does this mean for you?
While the mandatory deadline has been extended, employers can still choose to voluntarily payroll BiKs in 2026. Early adoption allows you to test and trial the process and offers a number of benefits, including:
- Improved accuracy: Ensures tax deductions are made in real-time, reducing the risk of underpayments or overpayments
- Enhanced employee experience: Provides employees with clearer tax codes and fewer year-end adjustments
- Streamlined processes: Reduces administrative burdens during the year-end reporting period
Preparing for the change
To ensure a smooth transition, you should consider the following steps as soon as possible:
- Assess payroll systems: Ensure your payroll software can handle the additional data fields required for benefit reporting
- Update internal processes: Review and adjust procedures for capturing and reporting benefits to align with real-time requirements
- Train staff: Provide training for payroll and HR teams to manage the new reporting obligations effectively
- Communicate to employees: Inform employees about the changes and how it may affect their tax codes and net pay
Taking proactive steps now, can help mitigate potential challenges and ensure compliance when the new rules come into effect.
Further guidance from HMRC is expected in the coming months to assist with preparation and implementation.
Conclusion
The delay in mandatory payrolling provides additional time to prepare for the transition. Considering early adoption and taking the necessary steps to update systems and processes can help ensure a smooth and compliant transition when the new requirements take effect in April 2027.
To help you navigate the changes, we offer a half-day course, covering everything you need to know about the transition to payrolling. It provides clear guidance and expert advice to ensure you’re fully prepared ahead of 2027. Find full details and secure your places here.
http://www.uktraining.eu/news-article/delay-in-mandatory-payrolling-of-benefitsinkind/199?type%5B%5D=ondemand