Employers- Mandatory Payrolling

The start date for mandatory payrolling has been delayed by one year. It will now come into effect from 6 April 2027 rather than from 6 April 2026. This will give you more time to prepare.

Under mandatory payrolling, all benefits in kind with the exception of employment-related loans and living accommodation benefits must be taxed through the payroll. It is currently not possible to payroll employment-related loans and living accommodation benefits but you will be able to do so voluntarily from 6 April 2027. If you opt not to do this, you will be able to report them after the year end using the P11D process as now.

The way in which you pay your Class 1A National Insurance on benefits in kind will change too. From 6 April 2027 it will be paid each month with your PAYE and National Insurance for that month rather than after the end of the tax year, as now.

We can help you prepare for the move to mandatory payrolling.