Payrolling Benefits In Kind
24th March 2025
From April 2026 it will be compulsory to payroll all benefits barring employment related loans and accommodation (loans and accommodation will be voluntary). With that in mind, just what would be the advantages of getting in early and payrolling your benefits from April 2025?
Apart from scrapping the need to produce P11D’s a year early, the answer has to be, pretty much nothing. However, you will be getting ahead of the game and, as the employees will be paying tax on their benefit via the payroll, it means the correct amount of tax will be paid in the year the benefit applies to. No shock underpayment notices from HMRC for the employer and no backdated tax code alterations for the employee.
As we already know, all payrolled benefits must be registered BEFORE the start of the tax year they are pertaining to and, if I was to say the take up on registering early has been a little on the slow side, I’d be in danger of over-stating the take up rate. Initially the complicated sign-up procedure could be seen as an excuse for the poor rate of registration, however the rules have been changed and we, as agents, can apply for payrolled benefits on behalf of clients.
Despite there being no real advantage to registering a year early, it would still be advisable to do so. Time passes quickly and the all too common “I’ll do it next week” approach is most unwise. By the time this is published it will be too late to register benefits for the 2025-26 tax year however, it can never be too soon to register for 2026-27.
Remember, under the existing system, the last time you can file a P11D will be 6th July 2027 which will reflect the benefits paid in the 2026-27 tax year. If you do not register to payroll benefits before April 2026, you will not be able make the necessary returns to HMRC.
Get In Touch
If you need any help or assistance regarding payrolling Benefits in Kind, please contact your local Whitings office and ask to speak to our Payroll Department.
Disclaimer - All information in this post was correct at time of writing.
