Payroll Hub · Simple employer guide
What employers need to do about payrolled benefits from April 2027
A straightforward guide to who is affected, what will change and the practical steps to take before April 2027.
Best for: Business owners and people working in payroll, finance or HR
- Plain-English guide
- Reviewed 11 August 2026
In simple terms
Status: HMRC interim guidanceIf you provide company cars, car fuel, vans, van fuel or private medical cover, the way you report and tax those benefits is due to change from 6 April 2027. Start by listing who receives each benefit and checking that your payroll provider is preparing for the change. You do not need to understand HMRC’s technical reporting fields to begin.
What changes on 6 April 2027?
Tax on the affected benefits will be collected through payroll during the year instead of relying mainly on reporting after the tax year ends. The benefit is still not salary and must not be added to the employee’s bank payment.
What should employers do before April 2027?
Make a list of the affected employees and benefits, check that names, dates and costs are correct, decide who tells payroll when something changes, and ask your payroll provider when its 2027 support will be ready.
Optional detail
Official guidance behind this answer
The short answers above are enough to get started. Open these sections only if you need to check the current HMRC position or source.
What Benefits in Kind must be payrolled from 6 April 2027?
Status: HMRC interim guidanceFrom 6 April 2027, HMRC says employers will need to put company cars, car fuel, vans, van fuel and employer-provided medical benefits through payroll.
Read the full answer and official source
These are the first five benefit groups in the change. HMRC currently plans to add most other Benefits in Kind from April 2028, while loans and accommodation will continue to have separate arrangements.
Source: HM Revenue and Customs — The phased introduction of mandatory payrolling for benefits in kind
Source updated: . Workmax reviewed: .
Are taxable expenses included from 6 April 2027?
Status: HMRC interim guidanceFrom 6 April 2027, HMRC also expects taxable expenses to move into payroll, but the exact scope is not yet final. Employers should identify these expenses now and wait for confirmed rules before changing payroll.
Read the full answer and official source
Different expenses can have different tax treatment. Make a list of what you reimburse or provide, but do not assume every expense will follow the same process.
Source: HM Revenue and Customs — The default operation of mandatory payrolling
Source updated: . Workmax reviewed: .
Plain-English Benefits in Kind glossary
- Benefit in Kind (BiK)
- A non-cash benefit or expense provided by an employer that may create an Income Tax liability.
- Payrolling benefits
- Including a benefit's taxable value in payroll so Income Tax is collected through PAYE.
- Cash equivalent
- The statutory taxable value of a benefit, which may differ from its purchase price or cash cost.
- Class 1A NIC
- An employer National Insurance liability charged on many taxable benefits and expenses.
- P11D
- The end-of-year form traditionally used to report taxable expenses and benefits for an employee.
- FPS
- The Full Payment Submission employers send through Real Time Information when payroll is reported to HMRC.
