April deadline approaching for employers considering payrolling Benefits in Kind

Employers reviewing how they report Benefits in Kind (BIK) should note an important deadline.

Businesses wishing to payroll benefits for the 2026/27 tax year must register with HMRC by 5th April 2026.

This tax year provides a chance to prepare for wider changes coming in 2027:

• Mandatory payrolling from 6 April 2027 – Most BIK will need to be included in payroll, with limited exceptions such as employer-provided living accommodation and beneficial loans.
• Current P11D reporting – Many employers still report benefits after the tax year ends, with employees’ tax typically collected via PAYE code adjustments or self-assessment. Employers also pay Class 1A National Insurance contributions.
• Payrolling benefits voluntarily – Tax on benefits is collected in real time through payroll, which can reduce year-end reporting workload. Employees may see tax deducted sooner, so careful communication is recommended.
• Gradual adoption – Employers may choose to payroll simpler benefits first while continuing to report other benefits via P11D, helping staff and payroll teams adjust ahead of the 2027 changes.

Key action point:

• Employers who have not previously registered for payrolling BIK must complete registration with HMRC before 5th April 2026. After this date, the current registration facility will close as HMRC prepares for the mandatory system.

Early adoption can help employers:

• Familiarise themselves with payrolling processes
• Communicate changes clearly to employees
• Reduce administrative pressures when payrolling becomes compulsory

For guidance on how these changes may affect your business, contact the Verallo team by emailing info@verallo.com or calling 0203 912 9933.