HMRC has announced a tax simplification update confirming the payrolling of benefits in kind will become mandatory from 6 April 2026. At present, the payrolling of benefits in kind is voluntary and many choose to submit annual P11Ds.
As it stands, all benefits can be payrolled except for employer-provided living accommodation and interest-free or beneficial loans. There has been no guidance released yet regarding what will happen with these under the new rules.
The Government is making the changes as a measure to simplify and modernise the tax system. HMRC has confirmed they will consult stakeholders on the details of mandatory payrolling, and that draft legislation will be published later this year.
We advise employers to carefully review the proposals once they become available and consider now how the changes may impact your systems and processes to prepare in advance for any changes you may need to consider implementing.
For further information or advice, contact Julie Walsh by clicking the button below.
