NEWS
Payrolling benefits in kind – have you heard ?
HMRC has announced that reporting and paying income tax and Class 1A NIC on benefits in kind through payroll will become mandatory from April 2026 .
Currently , taxable benefits are reported to HMRC on Forms P11D and P11D ( b ) by July 6 following the end of the tax year .
The employee is issued with a P11D and pays the income tax due on their benefits either through self-assessment or via adjustment to their PAYE tax code .
From April 2026 , all payrolled benefits will need to be included on the Full Payment Submission , which is sent to HMRC on or before each pay day .
Before employers can start , they must register with HMRC using the online service . Registration must be completed before the start of the tax year . Therefore , all registrations must be completed before April 2026 .
In the first year of operation ( 2026 / 27 ) it is possible that employees will have benefits from both 2025 / 26 and 2026 / 27 adjusted through their tax code – impacting their net pay . So , employers would do well to communicate these changes to their employees at the earliest opportunity .
Save money Larger businesses can often afford to have in-house payroll departments , but over the past decade , savvy smaller businesses have discovered how much time and money they can save by outsourcing payroll .
Save time How much time do you spend on payroll ? Factoring in the software costs , time lost printing and distributing payslips and creating documents for HMRC , you ’ ll know that it ’ s costly on the clock and ultimately takes you away from your core business activities .
Save headaches With new changes coming in , it ’ s well worth asking yourself whether you want to continue running your payroll in-house . Maybe it ’ s time to consider passing it over to a professional team that will efficiently process even the most complex of payrolls .
If you have specific questions on payrolling benefits in kind or you ’ d like a free no-obligation quote for your payroll needs , please contact Tracey Courtley , director of McBrides Payroll Bureau Services , and her friendly team on payroll @ mcbridesllp . com or 01429 239535 .