15 June 2026
HM Revenue and Customs (HMRC) has updated the interim guidance for mandatory payrolling to announce a new phased approach for all reportable Benefits in Kind (BiKs) and expenses from April 2027.
Delivery of this change will now take place in two phases. Under Phase 1, from April 2027, mandation will only apply to the following set of benefits:
-
company cars and fuel
-
vans and van fuel
-
private medical benefits.
All other BiKs will continue to be reported on P11D forms or via voluntary payrolling. The plan is to bring in most of these remaining benefits as mandatory from April 2028, with loans and accommodation benefits mandated at a later date.
With payrolling, the taxable value of BiKs and expenses will be reported via the Full Payment Submission (FPS), allowing tax and Class 1A National Insurance contributions (NICs) to be reported in real time.
Following feedback from external stakeholders, the Government has decided to allow additional time for preparation before all BiKs and expenses are to be reported via this method.
This phased approach will allow software providers more time to implement the additional FPS fields to help manage workload and mitigate delivery risks. Only 32 data fields are now needed compared to over 100 previously required to cover all BiKs.
HMRC has confirmed that anyone who has already planned to payroll all their benefits can still do so, with only company cars, vans, and private medical data to be entered into the specific FPS data fields. Additional benefits processed will be reported through the voluntary method and registration will likely still be required.
After feedback from external stakeholders, including the CIPP, the payrolling guidance will be updated in the next few weeks with fuller technical detail.
We are aware that the move to mandatory payrolling of benefits is such a big change. The CIPP Policy team is here to support our members and the wider pay community, if there are any queries with this please do get in touch. As always, we will keep you informed on any further updates.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.