The HM Revenue and Customs has opened the registration of non-mandated benefits (voluntary Payrolling) in readiness for April 2027.
The voluntary online payrolling service has reopened for registrations and cancellations.
Living accommodation and loans can now be payrolled.
They indicate that employer must register to voluntarily payroll most benefits in kind that are not mandatory prior to the start of the 2027/2028 tax year.
Employers cannot change the way they report benefits and expenses for the current 2026/2027 tax year.
Following registration, HMRC will adjust the tax codes for all employees getting benefits through voluntary payrolling for the 2027/2028 tax year and onwards to ensure the employee is not double taxed. Do not send any further P11D forms to HMRC for those benefits correctly payrolled.
When should we register!
The earlier the registration the better as leaving until 5th April 2027 may mean tax codes are not adjusted, issued and applied for the first payment in the new tax year.
Trying to register for the April payment from 6th April 2027 onwards but after 5th April 2027 registration deadline will be too late.
Plan your mandatory and voluntary Payrolling implementation project
Employers need to decide how they will deal with April 2027 mandatory items, and also what additional voluntary Payrolling items they will include from April 2027. Of course, many of those will become mandatory under the HMRC phase 2 mandation from April 2028.
Tell your employees
HMRC instruct employers to send employees written notification (by payslip, email or letter) by 1st June after the end of each tax year to explain that you’re payrolling benefits.
The notification must tell your employees:
- that they will not be taxed twice
- details of the payrolled benefits — this can include what the benefits are, the value, the cash equivalent and which ones have been subject to PAYE tax
- the amount you have payrolled for optional remuneration
- details of benefits you have not payrolled
For the first year of payrolling employers should also tell employees that:
- their tax code will change to take out the adjustment for their benefits in kind
- the employer will put the adjusted amount through payroll each month and they will pay tax on that amount
- at the end of the year the employer will tell them how much taxable benefit they have had in the year and what it was for
We’re ready! So how do we register?
On the employer and payroll agent online HMRC PAYE portal, ‘Payroll Benefits In Kind’ has been added to the right side menu:
This will take you through to the registration information which will indicate whether any prior registration has taken place:
If the employer has not payrolled before the are likely to see the following (please note these are examples relating to an agent view):
If an employer had already registered voluntarily, they will see those registered for tax year 2026/2027 and that these are carried forward to tax year 2027/2028:
Employers and their agents may now register in advance benefits to be payrolled from April 2027.
So to register for the first time or add new voluntary Payrolling benefits, tick those applicable:
Please note that the mandatory benefits under Phase 1 mandation are not part of the voluntary registration:
GET READY FOR PAYROLLING 2027
DON’T BE TOO LATE
Employers need to ready themselves now for mandatory and voluntary Payrolling for April 2027.
Identify what benefits you have.
Ready the relevant payroll configurations for April 2027 setting the appropriate benefit and NIC categorisation whether that is Class 1 (yes some benefits attract Class 1 NICs) or the new real time Class 1A employer only NICs on other benefits in kind (this applies to most, but not all).
Develop the process of where data is coming from and who is calculating the moneys worth of the taxable benefit charge.
How is this data to be applied for payroll processing.
What about mid year changes, starters, leavers, takeover, TUPE, change of software, mid year renewals etc.
Is there any associated reporting details required? There is extra data required for Company Cars and fuel, and also for Meducal Benefit costs to the employer.
Be prepared for the mandation phase 2. HMRC may require more data and information for other benefits from April 2028.
PAYadvice.UK 6/11/2026