Payroll Hub · Simple employer guide
What changes when benefits move from P11Ds into payroll?
See the practical difference between the familiar P11D process and payrolling benefits during the year.
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 guidanceFrom April 2027, the affected benefits move away from being dealt with mainly after the tax year. Instead, they will affect the employee’s tax during each relevant pay period. The biggest practical change is timing: payroll will need accurate benefit information throughout the year, not just at year end.
Do employers still need to submit P11Ds?
For benefits that are correctly included through payroll, the usual employee P11D is expected to fall away. Some other benefits or unusual cases may still need separate year-end action, so do not stop your current process until HMRC and your payroll provider confirm exactly what applies.
What will employers need to do differently?
Payroll needs to know when a benefit starts, stops or changes before the pay run is completed. Someone in your business must own that handover and check that the figures used by payroll still match your records.
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: .
What information will employers report through FPS?
Status: Draft HMRC technical specificationHMRC has published a draft list of benefit information that payroll software may need to send. Employers can start gathering the information, but the final list may still change.
Read the full answer and official source
The draft includes benefit values, employer Class 1A amounts and extra details for particular benefits. Company cars need the most information, including vehicle and availability details.
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.
