{"id":6084,"date":"2024-11-26T10:09:21","date_gmt":"2024-11-26T10:09:21","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=6084"},"modified":"2024-11-26T10:09:22","modified_gmt":"2024-11-26T10:09:22","slug":"what-does-hmrcs-new-benefit-in-kind-reporting-mean-for-your-payroll-system","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/what-does-hmrcs-new-benefit-in-kind-reporting-mean-for-your-payroll-system\/","title":{"rendered":"What does HMRC\u2019s new benefit in kind reporting mean for your payroll system?\u00a0"},"content":{"rendered":"

HM Revenue & Customs (HMRC) is introducing real-time reporting for benefits in kind (BiKs) starting in April 2026, meaning businesses must prepare for changes in how they manage payroll.\u00a0<\/span>\u00a0<\/span><\/p>\n

These updates aim to streamline tax reporting but bring new challenges and opportunities for employers.\u00a0<\/span>\u00a0<\/span><\/p>\n

The key changes<\/span><\/b>\u00a0<\/span><\/p>\n

Under the new rules, businesses must report most BiKs, such as private medical insurance and company cars, in real-time through their payroll software.\u00a0<\/span>\u00a0<\/span><\/p>\n

The days of relying solely on end-of-year forms like P11D are numbered, as these will no longer cover the majority of BiK reporting.<\/span>\u00a0<\/span><\/p>\n

However, there are exceptions.\u00a0<\/span>\u00a0<\/span><\/p>\n

Reporting of employment-related loans and accommodation will remain voluntary for now, with businesses able to use a modified P11D and P11D(b) if they prefer not to report these items in real-time.<\/span>\u00a0<\/span><\/p>\n

For businesses operating company car schemes, the traditional P46 (Car) forms will be scrapped, with payroll software taking on the task of real-time reporting.<\/span>\u00a0<\/span><\/p>\n

The impact on payroll systems<\/span><\/b>\u00a0<\/span><\/p>\n

These changes mean payroll systems must evolve to handle more detailed and accurate reporting throughout the year.\u00a0<\/span>\u00a0<\/span><\/p>\n

Employers will need to ensure their software is up-to-date and capable of meeting these requirements.<\/span>\u00a0<\/span><\/p>\n

Real-time reporting demands precise data entry, which increases the risk of errors if processes are not carefully managed.\u00a0<\/span>\u00a0<\/span><\/p>\n

An end-of-year process will still exist to amend taxable values of certain BiKs that cannot be determined during the tax year, but the emphasis will be on accuracy from the outset.<\/span>\u00a0<\/span><\/p>\n

What should businesses do?<\/span>\u00a0<\/span><\/p>\n