Phased mandatory payrolling

Mandatory payrolling comes into effect from 06^th April 2027. Originally, it was due to apply to all taxable benefits and expenses from that date other than employment- related loans and living accommodation benefits.

However, the Government have now announced that mandatory payrolling will be phased in and will only be compulsory from 06^th April 2027 for:

• Company cars and vans
• Car and van fuel
• Employer-provided medical benefits

The majority of the remaining benefits will be bought within mandatory payrolling from April 2028, with the exception of employment-related loans and living accommodation benefits, which can be payrolled voluntarily.

Under mandatory payrolling, the paying and reporting of Class 1A National Insurance on payrolled benefits is to be bought in-year, with the liability reported on the Full Payment Submission each month and the associated Class 1A National Insurance paid with the PAYE and Class 1 National Insurance for the month.