Mandatory payrolling of BIK will be phased in from April 2027, as follows:
- phase one: company car, van, fuel and medical benefits will be payrolled from 6 April 2027; and
- phase two: all other benefits, excluding loans and accommodation, will be payrolled from 6 April 2028.
The payrolling of loans and accommodation will remain voluntary until further notice as they can be difficult to value within the tax year.
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GMEs
On 16 September 2026, HMRC announced that employers will have the option to voluntarily exclude globally mobile employees from mandatory payrolling from 6 April 2027. This will be achieved through a new service to be available from November 2026. HMRC says that employers should continue to use existing year-end reporting arrangements for these employees through forms P11D and P11D(b).
HMRC plans to publish more detailed guidance on the changes in autumn 2026.
ICAEW’s view
“ICAEW welcomes the announcement having previously called for GMEs to be excluded from mandatory payrolling, due to practical issues relating to operating payrolls and collating data for expatriate employees. However, it is important that HMRC’s detailed guidance and definitions are clear and comprehensive, so that employers can have confidence that they are applying them correctly.”
Class 1A NIC
Further, HMRC has confirmed that, where an employer chooses to voluntarily payroll benefits that are not mandated during phase 1, the employer must payroll in real time any associated class 1A NIC from 6 April 2027.
Further information
Prepare for 2026/27 series
ICAEW's Tax Faculty looks at the key tax changes applying from April 2026.
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