If you, as an employer, provide any of the mandated benefits, including those offered via salary sacrifice or other Optional Remuneration Arrangements (OpRA) being:
- Company Cars including salary sacrifice cars
- Car fuel
- Company Vans
- Van fuel
- Medical benefits
Then you need to start your Payrolling plans now.
Does mandation affect those who have voluntarily payrolled already?
Absolutely, the current configurations need to be checked to see if they appropriately identify the different reporting areas as they are no longer combined as one lump sum.
Also April 2027 see the first obligation for payroll Class 1A on benefits in real-time.
What employers should do now
Although these mandatory changes do not take effect until April 2027, employers will have to start preparing now.
What do employers need to do?
Employers should:
- review the benefits in kind provided to employees. What are they and do they need to be appropriately classified. Which are subject to Class 1 or the new real-time Class 1A National Insurance on benefits.
- consider any change project for your payroll, HR and finance processes
- speak to your benefit providers as you will need benefit details for Payrolling such as the taxable benefit amount
- Interact with your payroll software, payroll provider or agent if they help you manage payroll to progress getting your payroll ready
- Consider adding non mandatory voluntary benefits to your list to payroll, and ensure that they are appropriately registered in good time
- Work out how you will get the benefit data from the providers and applied to the payroll for processing
- consider how you will communicate these changes to your employees and whether there is a need for a benefit statement or the payslip will suffice
- check regularly for further updates and guidance as the PBIK policy evolves
How employers transition from the former voluntary Payrolling, or the former P11D forms submission to the new mandatory Payrolling requirements needs suitable planning. Budget needs to be considered to cover any associated additional costs for handling.
PAYadvice.UK 25/10/2026