As employment tax advisers work towards the P11D submission of 6 July with clients, what better time for us to receive updated guidance from HMRC on the mandatory real-time payrolling of benefits in kind (BIKs) from April 2027.
On 15 June 2026, HMRC announced that, following feedback from stakeholders, the mandatory payrolling of certain BIKs and taxable expenses will now be phased in. Phase 1 will commence from 6 April 2027 and Phase 2 will commence from 6 April 2028. The aim is to support a smoother transition for employers.
From 6 April 2027, HMRC has confirmed that Phase 1 of mandatory payrolling will be phased in for:
- Company car and van benefits
- Car and van fuel benefits
- Employer-provided medical benefits.
HMRC will provide “draft data item guidance in the coming weeks”, reflecting the removal of 94 real time information (RTI) data fields for benefits from Phase 1.
Following this update, HMRC says it will continue to work with stakeholders to resolve outstanding issues, including the potential to “introduce voluntary Class 1A reporting for non-mandated benefits, throughout summer 2026”.
Phase 2 will commence from 6 April 2028, to include the mandatory payrolling of most other BIKs but still excluding loans and accommodation which will remain voluntary at that point.
Further updates are expected in the coming weeks with the aim of HMRC’s final guidance for Phase 1 from 6 April 2027 published to align with Autumn Budget 2026.
Although it is welcome that HMRC appear to be listening regarding concerns on outstanding issues, we feel having different reporting requirements for different BIKs over an extended period will likely create more uncertainty and work for employers as we head towards full mandatory payrolling.
If we can help you with any queries about mandatory payrolling of BIKs, please contact our Employment Tax team.
