Sarah Bradford explores what mandatory payrolling will look like when it comes into effect from April 2026.
Currently, employers providing taxable benefits-in-kind to employees have the choice as to whether they opt to payroll them or whether they report them to HMRC after the end of the tax year on the employee’s P11D.
However, this is to change from April 2026. Employers who have yet to move to payrolling will need to do so from 6 April 2026 because from that date, payrolling becomes mandatory for all but a couple of benefits.
What is payrolling?
As the name suggests, under payrolling, taxable benefits-in-kind are ‘put through the payroll’. The taxable amount of the benefit is treated as if it were additional wages or salary. The employee’s tax for the period is calculated on their total earnings for that period, including the
