HMRC is set to make a major change to 94 different benefit payouts, with mandatory real-time reporting of tax and National Insurance contributions. Starting in April 2027, mandatory payrolling of benefits in kind (BIK) will be phased in for company cars, car fuel, vans, van fuel and employer-provided medical benefits.
Phased Rollout Details
Phase one will begin from 6 April 2027, covering mainly motoring expenses and medical benefits. Phase two will commence a year later, introducing mandatory payrolling of most other BIKs, excluding loans and accommodation, which will remain voluntary.
This marks a significant watering down of the original plan that impacted nearly all benefits. HMRC initially hesitated to delay the plans but has done so by removing 94 categories from the initial rollout.
Government Guidance
The government said that final guidance regarding the initial phase will be published to align with the Autumn Budget 2026. HMRC will provide draft data item guidance to reflect the removal of 94 real-time information (RTI) data fields for BIKs in company payrolls.
It is claimed these changes will make it easier for employees to understand what they are being taxed on and pay in real time. The change was originally planned to start this year.
