Two HMRC Payrolling Benefits Updates.

HMRC today opened its voluntary payrolling of benefits and expenses online service ready for the new tax year.

As you are aware HMRC is mandating payrolling benefits from April 2027 for:

• Company cars and fuel
• Company vans and fuel
• Medical insurance

HMRC has today announced it has reopened it registration service for the non-mandated benefits. Here you will be able to register to voluntarily payroll benefits or cancel your registration to voluntarily payroll benefits for the new tax year.

You will also be able to see which benefits are currently being payrolled and a list of employees included and those you have excluded from a payrolled benefit.

Remember you do not need to register for the mandated benefits for the 2027-28 tax year.

For any mandated benefits and those you voluntarily payroll for the 2027-28 tax year you will need to account for Class 1A National Insurance in real-time using your payroll software.

Here is HMRC guidance document – Voluntary Payrolling Benefits.

At the same time HMRC announced its service to start or end an exception to mandatory payrolling benefits has also opened. 

When the mandated service starts in April 2027 you can apply to HMRC for an exception from mandatory payrolling of benefits in kind for globally mobile employees.  This will allow the continuation of P11D and P11D(b) for those affected.

Their guidance mentions globally mobile employees include those who work or are likely to work either:

• Both in and outside the UK
• In the UK, and receive benefits or expenses from their employer outside the UK
• Outside the UK, and receive benefits and expenses from their employer in the UK

You may be able to get an exception for your globally mobile employees if their international working arrangements mean both that:

• They are likely to receive benefits or expenses in at least two pay periods in a tax year
• You will not have enough information to payroll the benefits or expenses when the employee receives them.

Employees are not usually eligible if they only have:

• Short-term business travel or remote working outside the UK
• Occasional overseas meetings
• Other temporary travel arrangements

This doesn’t remove the benefit it just changes how the employee’s benefit is reported.  The Income Tax and National Insurance are still calculated in the same way.

You should apply for the exemption as soon as you become aware that an employee is, or likely to be, a globally mobile employee as it is not possible to backdate an exception.

HMRC states that you must continue to payroll the benefit until the exception start date you record on the form.

An exception continues for the rest of the tax year and the following years unless you give HMRC an end date on the form or you have told HMRC you are stopping the exception.

To apply or for more information follow the link at the bottom of this page start or end an exception to Mandating payrolling of benefits.