Mandatory Deadline Approaching: PAYROLLING for Benefits in Kind (BIK) - Ad Valorem

In a recent announcement, HMRC has introduced a significant change for employers providing Benefits in Kind (BIK) or reimbursing expenses to their employees. Starting 6th April 2026, all employers must register and comply with payrolling for Benefits in Kind. This new system aims to simplify the tax reporting process, collecting the necessary taxes in real-time rather than waiting until the end of the tax year.

What is PAYROLLING for Benefits in Kind?

PAYROLLING for Benefits in Kind offers a modernized way of managing BIK, allowing employers to include these benefits directly in their payroll system. Instead of waiting to file a P11D form at the end of the tax year, the tax owed on BIK is accounted for during each pay period. This real-time adjustment increases transparency and reduces administrative burdens for both employers and employees.

Key Actions Employers Must Take:

1. Register Early:
To ensure compliance, employers must register for payrolling for Benefits in Kind with HMRC before the 5th of April of the applicable tax year. While the official deadline is in 2026, it’s advisable to register as early as possible to avoid last-minute rushes, penalties, or compliance issues.

2. Update Payroll Systems:
Once registered, employers will need to ensure that their payroll systems are capable of handling payrolling for Benefits in Kind. This may involve updating payroll software and adjusting internal payroll procedures. Our team is available to assist with these changes to ensure that your payroll system is fully compliant.

3. Inform Employees:
It’s essential to communicate these changes to your employees, as their payslips and tax codes will be impacted. Clear and timely communication will help avoid any confusion regarding their take-home pay and tax obligations. We can assist in preparing the necessary employee communications.

How We Can Help:

We understand that navigating these changes can be complex and time-consuming. That’s why we’re offering comprehensive support to help businesses register and implement payrolling for Benefits in Kind. From registration to adjusting your payroll system, we’re here to ensure you meet all HMRC requirements without additional stress on your internal team.

Next Steps:

We recommend taking immediate action to ensure you’re on track for the 2026 deadline. If you need assistance with registration, payroll updates, or any other related services, don’t hesitate to get in touch with us. Our goal is to help you stay compliant while minimising any disruptions to your business operations.

Contact us to discuss your payrolling for Benefit in Kind requirements.