Updated guidance on mandatory payrolling of benefits in kind    

Much like the rollout of mandatory payrolling of benefits in kind, HMRC guidance on the matter is coming in dribs and drabs. What's the latest?

Updated guidance on mandatory payrolling of benefits in kind    

HMRC's latest update includes two points on mandatory payrolling of benefits in kind. Mandatory payrolling is being phased in from 6 April 2027 and 6 April 2028, but employers can payroll benefits voluntarily if they wish. Currently, employers who voluntarily payroll benefits for income tax can continue to report and pay the employers' Class 1A NI liability after the end of the tax year. That will no longer be the case from 6 April 2027. Even where non-mandated benefits are payrolled voluntarily, the associated Class 1A NI contributions need to be made in real time through payroll.

 It is tempting to payroll all benefits from 6 April 2027 for simplicity but doing so doubles your NI costs for 2027/28. This is because you must pay Class 1A NI for 2026/27 benefits by 6 July 2027, and on 2027/28 benefits through the payroll each month. 

The second update is that the list of exemptions has been extended to include globally mobile employees. It can be difficult to calculate and report benefits in real time when an employee is working overseas so such benefits can continue to be reported on form P11D after the end of the tax year. You must inform HMRC which employees are globally mobile if you want to use the exemption, and a dedicated form will be made available in November 2026.