WFM UK: Payrolling Benefits in Kind to Become Mandatory

Overview

On 28th April 2025, the Government provided an update on Mandating the reporting of benefits in kind and expenses through payroll software. It was stated that additional time has been given for the introduction of Payrolling Benefits in Kind, which is now to become mandatory on benefits provided from 6th April 2027. Income Tax and Class 1A National Insurance Contributions on Benefits in Kind will be required to be calculated and paid via Payroll and reported via Real Time Information.

Currently, employer-provided living accommodation and interest-free & low-interest (beneficial) loans cannot be payrolled, so unless this changes, the use of electronic P11D submissions will still be required for those benefits. For all other benefits, P11Ds will not need to be provided to employees but a statement of benefits that have been payrolled will be required each tax year. The electronic submission of a P11D(b) will still be required by the 6th of July each year when payrolling Benefits in Kind.

Further details on payrolling Benefits in Kind can be found here.

Fourth's Response

Fourth is aware of payrolling Benefits in Kind and we have already started work on a solution throughout 2024 and 2025 in anticipation. We will continue these efforts to ensure we remain compliant with the requirements and legislation.

Any additional questions around the Fourth solution for payrolling Benefits in Kind can be sent to payroll@fourth.com 

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