HMRC has outlined changes to the reporting of benefits-in-kind (BiKs) expenses through payroll software, set to take effect from April 2026.
Under the phased introduction, employers must report BiKs in real time via payroll software, except for employment-related loans and accommodation, which can be reported voluntarily. Businesses choosing not to payroll these can use a modified P11D and P11D(b).
HMRC has confirmed no decision has been made on mandating loans and accommodation reporting through payroll software. A spokesperson stated, “Careful consideration will be given to make sure sufficient notice of any change will be provided.”
The updated rules will also include an end-of-year process to correct taxable values of BiKs that cannot be finalised during the tax year. However, employers are expected to report most BiKs as accurately as possible throughout the year.
Additionally, company car scheme operators will no longer need to submit P46 (Car) forms, as payroll software will enable real time reporting of required data.
HMRC said:
“We will continue to work with stakeholders to make sure that the mandatory reporting of BiKs through payroll software works for both HMRC and taxpayers. We will provide updates on plans to publish draft legislation and technical specifications.”
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