Yes, we know, just when you thought you’d mastered the joy that is P11D reporting, HMRC has decided to shake things up. Again.
A Quick Refresher (Because Who Doesn’t Love a Bit of Tax History?)
Since April 2016, employers could voluntarily payroll benefits in kind (PBIK) instead of slogging through P11Ds. A few early adopters jumped on board. Most didn’t. Because, let’s face it, why fix something unnecessarily complicated when you’ve already built your annual routine around it?
Fast-forward to Now…
Back in September 2024, we flagged that compulsory PBIK was on the horizon for April 2026. Well, surprise – it’s been delayed. You’ve now got until April 2027 before it becomes mandatory. Apparently, even HMRC likes to kick the can down the road occasionally.
From 6 April 2027, payrolling benefits will no longer be optional – unless you're dealing with things like company-provided living accommodation or beneficial loans, which will remain resolutely stuck in the P11D dark ages.
Here’s the New Rollout:
| Tax Year | Reporting Method |
|---|---|
| 2024/25 | P11D or voluntary PBIK – tax collected via tax codes |
| 2025/26 | Same again – nothing changes |
| 2026/27 | Still the same – final year of breathing space |
| 2027/28 | Mandatory PBIK – tax collected per pay period |
What Should Employers Be Doing (Other Than Sighing)?
Use the extra year wisely. If you’re not already payrolling benefits, now’s the time to start mapping out your plan. Review what benefits you offer. Talk to payroll, HR, and your benefit providers – yes, even the fleet guy.
And while we’re all waiting for HMRC to publish more crystal-clear guidance (ahem), it’s clear that some form of the P11D may linger on post-2027 – mainly for complex bits like accommodation and globally mobile staff.
Want to Get Ahead of the Curve?
Voluntary payrolling for 2026/27 is still on the table. If you want to avoid the inevitable last-minute scramble (and the annual tax code bingo), consider piloting PBIK next year. But don’t forget – you’ll need to tell HMRC before 5 April 2026.
Our advice? Start planning between now and December 2025. That way, you’ve got time to test your systems, communicate with your team, and keep the chaos to a minimum.
Need a Hand?
We’ve helped plenty of employers implement PBIK – from setting up the process to training your team and making sure employees don’t panic when their payslip changes.
Want to stay one step ahead before 2027 hits? Book a chat with your client manager.
