Our Guide To Payrolling Of Benefits

From April 2027, the payrolling of benefits in kind will become mandatory, bringing an end to the traditional P11D process. Although that date may feel distant, employers should begin preparing now. To help you get to grips with what’s ahead, we’ve created a clear, practical guide covering the key points you need to know.

Payrolling of benefits means including the taxable value of certain employee benefits in payroll, allowing tax to be deducted via PAYE in real time. While this has been available on a voluntary basis for some time, it will soon become compulsory for most businesses. Understanding how this works, what can and can’t be payrolled, and how to communicate it to employees is essential.

This guide outlines which benefits are eligible for payrolling, how to register, and what steps to take when employees leave or reimburse benefits (“make good”). It also explains how the 50% regulatory limit on tax deductions affects your payroll calculations, and why reporting via Full Payment Submissions is key.

We also highlight special considerations for globally mobile employees, where HMRC may still allow P11D reporting in certain cases, and provide guidance on issuing benefit summaries for employees who complete Self Assessment tax returns.

Whether you’re considering voluntary payrolling ahead of the deadline or need to understand how to get your systems ready, this guide offers a clear and accessible starting point.

Click the image below to download the guide and get started.

This guide aims to provide straightforward guidance, but every business has its own circumstances to consider. If you need further help assessing what this means for your business, our experienced team at R J Francis & Co is here to help. We offer practical, up-to-date advice tailored to your situation. Please get in touch if we can support you with this.