Delay in full rollout of payrolling benefits

HMRC have recently announced that they will phase the rollout of payrolling benefits from April 2027.

If you are an employer and you provide expenses and benefits to employees and directors, you must report these to HMRC and pay National Insurance on these benefits. Currently they are reported to HMRC using forms P11D and P11D(b). After the end of the tax year the taxable value of the expenses and benefits is calculated and reported to HMRC on forms P11D and P11D(b) by 6 July. The employer then pays the Class 1A National Insurance liability by 22 July.

This was due to change from 6 April 2027, where all benefits were to be reported via the payroll scheme, however, there has been a relaxation announced and this will now be introduced over a few years.

Phase 1 – From 6 April 2027

Employers providing employment benefits for company cars and vans, fuel and employer-provided medical benefits will need to report these via the payroll. The associated Class 1A National Insurance liability will also be due for payment at this time.

Phase 2 – From 6 April 2028

Most other benefits will be mandated for payrolling from 6 April 2028 with the exception of beneficial loans and accommodation benefits. Although these benefits can be payrolled on a voluntary basis.

Further guidance is due to be published to align with the Autumn Budget 2026.