The HM Revenue and Customs (HMRC) have updated the draft guides on Mandating Payrolling Benefits in Kind (MPBiKs) on the evening of Friday 31st July 2026.
31st July 2026 update:
The default operation of mandatory payrolling
Benefits in kind that come under mandatory payrolling from April 2027 have been listed.
The guidance has been updated to clarify that additional FPS reporting will apply from April 2027 only to:
- company cars,
- car fuel,
- vans,
- van fuel
- and private medical benefits
Getting ready for mandatory payrolling of benefits in kind
The voluntary registration service will be reopened in November 2026 to register to payroll all non-mandatory BiKs (including loans and accommodation) from April 2027.
New section added on corrections and adjustments.
Future updates and timeline of delivery
The delivery timeline has been updated.
Annex 1 – payrolling examples for different scenarios
New section added on payrolling medical benefit replacing the gym membership section.
RTI Benefits in kind data has been updated.
The Benefits in kind draft data items have been updated for Full Payment Submission (FPS) returns from April 2027.
Draft RTI Data Items Guide 2027-2028
The HMRC Software Developers Support Team also issued the HMRC policy team’s updated draft of the Real Time Information (RTI) data items on the afternoon of Thursday 6th August 2026.
We wrote to you on 15 June with an announcement that Mandating Payrolling of Benefits in kind would be introduced in phases. Following on from that, we are now sharing a draft RTI Data Items Guide for 2027-28. The draft data item guide provides an early view of the RTI data items being developed for the Phase 1 MPBiKs RIM artefacts and is intended to support development planning and provide an early opportunity for feedback and clarification.
This draft guide claims to reflect the Phase 1 (2027-2028 tax year) reporting requirements and provides additional information on the RTI data items that will be required for Phase 1.
It includes:
- a list of data items for FPS and EPS submissions for Phase 1
- a basic description of each field, including how they potentially should be completed and how frequently it should be reported
Software developers are requested to use this document to support your planning activities and to provide feedback on the Phase 1 data items. A further draft of this Phase 1 document – version 0.2 will be shared in the coming weeks to reflect further development and stakeholder feedback ahead of the planned publication of the Phase 1 RTI technical specifications in Autumn 2026. At this time, the baselined v1.0 RTI Data Item Guide will also be published.
We continue to engage with stakeholders as part of the ongoing delivery of MPBiKs and welcome feedback on the draft guide. We would be grateful if you could review it and share any comments or queries with us.
If you have any questions or require clarification, please submit them using our online query form: MPBiKs Query Form.
Interim guidance for employers, payroll professionals and tax agents was first published on GOV.UK in November 2025.
This guidance, Mandatory payrolling of benefits in kind and expenses – interim guidance and legislation – Guidance has since been updated to reflect the phased introduction of mandating payrolling. This includes examples covering a range of payrolling scenarios which you may find useful.
Additional guidance will be published in Autumn 2026 to support the implementation of Phase 1 from April 2027.
The draft revised and new data items
Company Cars and fuel
The original company car and fuel data which was generally reported once or at a change point are proposed to be withdrawn.
A new set of company car reporting fields which indicate being reported each pay period are proposed with the addition of some new added car data items.
The following are already used for Payrolling of company cars but allocated to new data items:
The following added new fields for company car reporting are indicated as additionally required from April 2027, these values adjust the taxable benefit applied are being introduced for reporting where applicable:
With the operation of salary sacrifice schemes, there is often confusion with many having the view that the individual employee or director are buying the car via some capital contribution. Now if that was being deducted after tax and NI, then maybe that would be the case, however, that would not be salary sacrifice. With salary sacrifice, the individual has agreed to taking a contractual pay cut, they are paying for nothing and the resulting Car is a company car for tax purposes.
The following new data item appears to be required for older vehicles where provided as a company car:
Then there are the actual payrolled amounts this time and tax year to date indicated as being required in relation to the car and the fuel which now have their own reporting fields..
These reporting values relate to the taxable totals of the benefit and not the individual company cars.
Company Vans and fuel
The HMRC are introducing a separate set of financial values to report company van and van fuel benefit amounts this time and year to date:
Medical benefits
Also introduced are separate reporting fields for medical benefits. HMRC appear to have introduced an additional field not used before fir Payrolling to record the employers cost:
New Class 1A reporting fields relating to payrolled benefits
From April 2027, real time Class 1A National Insurance is introduced for operation of PAYE in payroll. The only prior Class 1A allowed in real time prior was for Termination Payments and Sporting Testimonials which already have their own separate reporting fields.
Most, but not all, benefits attract Class 1A NICs which is currently 15%. Until the end of the 2026/2027 reporting cycle, this is both reported and accounted on form P11Db which can be completed on by employers with the payment due by 22nd July following the close of the tax year.
The P11Db process continues fir benefits reported on firm P11D and other adjustments, for all payrolled benefits wether mandatory or voluntary, the Class 1A amount is now to be reported in real-time with payments alongside other Tax and NICs amounts due.
The following new data items are proposed:
It is not currently clear what the following adjustment amount is for and if it serves a real purpose, as a general principle, adjustments would already be included in the year to date reporting amount. However, the following is currently proposed:
The pre-existing benefit values
The former voluntary Payrolling values continue in use and incorporate the new individual reporting amount.
So the taxable pay values are to incorporate the totals applicable for all the benefits whether via,unitary or mandatory:
And the original totals for amounts payrolled are to include the new values for Cars, Vans and Medical:
Opinion
Things are now getting tight for April 2027. Although the detail is welcome, the engagement with software developers has been staggered and variable with limited opportunity for codesign.
These data items have.not been settled between HMRC policy and the software developers community representatives.
Representation of the developer and payroll community has highlighted the difficulties of the former proposed 140plus data items which has resulted in this welcome and new phased approach of dealing with the limited number of benefits that cover 95% of all employee benefits in kind.
No linger does software for all size of employers have to have had entry capability for Private Planes, Precious Metals and Timeshares.
However, there are still some onerous requirements being placed on payroll and software for granular real time company car reporting that extend beyond the former voluntary arrangements.
Obtaining P11D data in time can be a challenge for employers now. Will the benefit or fleet managers be up to speed with giving accurate data up front and in time for payroll process deadlines. April 2027 is going to be interesting
PAYadvice.UK 8/8/2026