{"id":6877,"date":"2026-03-11T10:01:50","date_gmt":"2026-03-11T10:01:50","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=6877"},"modified":"2026-03-11T10:01:53","modified_gmt":"2026-03-11T10:01:53","slug":"voluntary-payrolling-of-benefits-in-kind-how-can-your-business-prepare","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/voluntary-payrolling-of-benefits-in-kind-how-can-your-business-prepare\/","title":{"rendered":"Voluntary payrolling of Benefits in Kind: How can your business prepare?"},"content":{"rendered":"

If your business offers employees perks such as company cars or private health insurance, you need to be aware of the upcoming changes to how these are taxed and reported.<\/p>\n

<\/p>\n

From 6 April 2027, HMRC will require most Benefits in Kind (BiKs) to be reported through payroll in real time and replace the annual P11D reporting process.<\/p>\n

This will become mandatory from the 2027-28 tax year, but employers have an opportunity to adopt the system early through voluntary payrolling.<\/p>\n

With the registration deadline for this approaching, businesses need to understand what voluntary payrolling involves and how to prepare.<\/p>\n

What is payrolling BiKs?<\/strong><\/h3>\n

BiKs are non-cash perks that employees receive in addition to their salary.<\/p>\n

Employers traditionally report these benefits annually using P11D and P11D(b) forms, with employees often seeing adjustments to their tax codes later to collect the tax owed.<\/p>\n

Payrolling benefits changes this process and employers will need to include the taxable value of benefits directly through the payroll each pay period.<\/p>\n

From April 2027, most BiKs will need to be reported through payroll via Real Time Information (RTI) submissions.<\/p>\n

However, there will be a one-year deferral for beneficial loans and employer-provided accommodation.<\/p>\n

What is voluntary payrolling for BiKs?<\/strong><\/h3>\n

Before the mandatory rules come into force, HMRC is encouraging employees to trial the system by adopting voluntary payrolling for the 2026-27 tax year.<\/p>\n

Employers will also have the choice to tax certain benefits through payroll.<\/p>\n

Those who wish to register for voluntary payrolling with HMRC must do so before 5 April 2026.<\/p>\n

If the deadline is missed, businesses will generally need to wait until the mandatory regime begins in April 2027.<\/p>\n

Why should you consider voluntary payrolling BiKs?<\/strong><\/h3>\n

Although voluntary payrolling is optional, many businesses see it as the most practical way to prepare for the upcoming changes.<\/p>\n

Other advantages include:<\/p>\n

    \n
  • A<\/strong> smoother transition to the 2027 rules \u2013<\/strong> Gives your payroll teams a full tax year to prepare your systems and processes before it becomes mandatory.<\/li>\n
  • Reduced year-end administration \u2013<\/strong> Employers can reduce reliance on P11D reporting and year-end corrections.<\/li>\n
  • Improve employee transparency \u2013<\/strong> Employees pay tax on benefits as they receive them, which reduces the risk of unexpected tax adjustments or backdated charges.<\/li>\n
  • Spot issues early \u2013<\/strong> Testing the process allows you to resolve payroll or data issues well before they become mandatory.<\/li>\n<\/ul>\n

    How can your business prepare for voluntary payrolling BiKs?<\/strong><\/h3>\n

    Businesses considering voluntary payrolling need to act now to ensure their systems, processes and teams are ready for the new requirements.<\/p>\n

    Your business should:<\/p>\n

      \n
    • Review your benefits \u2013<\/strong> Create a clear list of all benefits offered, how they are valued and where the data comes from.<\/li>\n
    • Register before the deadline \u2013<\/strong> You must register with HMRC before 5 April 2026.<\/li>\n
    • Check payroll systems \u2013 <\/strong>Ensure your payroll software can handle payrolled benefits and calculate tax and Class 1A National Insurance correctly.<\/li>\n
    • Align payroll processes with benefits data \u2013<\/strong> Make sure your benefits information can be collected and reported in time for each payroll submission.<\/li>\n
    • Communicate with employees \u2013<\/strong> Explain the changes early so employees understand how benefits may appear on their payslips and affect take-home pay.<\/li>\n<\/ul>\n

      How can we support your voluntary payrolling?<\/strong><\/h3>\n

      These new rules will affect your BiKs reporting and will become an ongoing payroll responsibility.<\/p>\n

      Our expert team can advise you on your payroll and tax obligations and help your business prepare for voluntary payrolling for BiKs.<\/p>\n

      We can support your HMRC registration and assess whether your benefit calculations are accurate and compliant.<\/p>\n

      If you want to set up voluntary payrolling or are not sure if it is right for you, you must seek professional support now.<\/p>\n

      For further advice or information on payrolling BiKs, contact our team today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

      If your business offers employees perks such as company cars or private health insurance, you need to be aware of the upcoming changes to how these are taxed and reported.<\/p>\n","protected":false},"author":2,"featured_media":6880,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,125],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6877"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=6877"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6877\/revisions"}],"predecessor-version":[{"id":6878,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6877\/revisions\/6878"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/6880"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=6877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=6877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=6877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}