Upcoming Changes: Reporting Benefits-in-Kind via Payroll from April 2026

Starting from April 2026, UK employers will be required to report and pay Income Tax and Class 1A National Insurance Contributions (NICs) on most Benefits-in-Kind (BiKs) through payroll software. This change aims to simplify the reporting process and reduce administrative burdens for both employers and HM Revenue & Customs (HMRC). Employers will no longer need to submit Forms P11D and P11D(b) for most BiKs, as these will be processed in real-time through payroll.

However, there are exceptions. Employment-related loans and accommodation will not be included in the mandatory payrolling requirements initially. Employers can choose to payroll these benefits voluntarily from April 2026, but they are not required to do so. If employers opt not to payroll these benefits, they will still need to report them using the traditional P11D and P11D(b) forms.

To prepare for these changes, employers should assess their current payroll systems to ensure they can handle the real-time reporting of BiKs. This may involve updating software, training staff, and establishing processes to capture and report BiKs accurately. Starting the transition early can help identify and address any issues before the mandatory reporting begins.

At McKendrey Accountants LTD, we are committed to supporting local businesses in Horwich, Bolton, and across the North West through these changes. Our team can assist you in navigating the new requirements, ensuring compliance, and streamlining your payroll processes. Contact us today to discuss how we can help your business prepare for the upcoming changes in BiK reporting.