- In January 2024, HMRC announced the mandatory payrolling of all benefits in kind from April 2026 and the change was confirmed in the Autumn Statement on 30 October 2024. So far, HMRC have released limited detail on how this change will work exactly, with many detailed policy design questions remaining open. To date, is has been confirmed that:
- The intention is for mandatory payrolling of benefits to be mandatory for all employers and all benefits, excepting only loans and accommodation benefits.
- Loans and accommodation can be voluntarily payrolled but employers would need to register to do so
- Income Tax and Class 1A will need to be reported and remitted by employers through Real Time Information reporting, removing the need to file Forms P11D and P11D(b).
- Forms P11Ds/P11D(b)s will still need to be produced for tax years up to and including 2025/26 (filing deadline 6 July 2026).
- Providing benefits in kind is an integral part of most employers’ reward strategy which impacts multiple stakeholders, including HR/reward, benefit providers/vendors, tax, payroll, software providers, and of course employees. The change to payrolling all benefits for all employees will require a major transformation project for most organisations, involving buy-in and co-operation from all stakeholders involved.
- Timing: HMRC have announced that all benefits in kind will need to be reported via the payroll from 6 April 2026. Further updates from HMRC regarding policy decisions, including draft legislation and guidance are expected during Summer 2025.
Resources (click to open)
- Mandatory payrolling all benefits in kind – the end of P11Ds (part 3) (Deloitte Dbriefs Webcast, 10 December 2024)
- Mandatory payrolling all benefits in kind – the end of P11Ds (part 2) (Deloitte Dbriefs Webcast, 30 July 2024)
- Mandatory Payrolling All Benefits In Kind – The End Of P11Ds (part 1) (Deloitte Dbriefs Webcast, 14 March 2024)
- Confirming plans to mandate the reporting of benefits in kind via payroll software from April 2026 (HMRC policy paper, 30 October 2024)
- Mandating the payrolling of benefits in kind (HMRC policy paper, 16 January 2024)
