HMRC Issues April 2026 Employer Bulletin: Key Payroll and Tax Changes for Businesses
HM Revenue and Customs (HMRC) published its April 2026 Employer Bulletin on 15 April 2026, delivering critical guidance for employers and payroll professionals at the start of the 2026/27 tax year. The bulletin covers wage increases, statutory pay reforms, benefits changes, and specific warnings on Real Time Information (RTI) submission errors.
National Minimum Wage and Living Wage Updates From 1 April 2026, new hourly rates apply immediately in the first pay period on or after that date. The National Living Wage for those aged 21 and over rises to £12.71. Rates for 18-20 year olds increase to £10.85, with 16-17 year olds and apprentices moving to £8.00. HMRC urges employers to avoid common underpayment pitfalls, such as incorrect working time calculations or improper salary sacrifice deductions, and recommends free external webinars for compliance support.
Major SSP Reforms from 6 April 2026 Statutory Sick Pay (SSP) changes remove the three unpaid waiting days, allowing payment from day one of sickness. The Lower Earnings Limit is abolished, extending eligibility to more low-paid and part-time staff. The weekly SSP rate is now £123.25 or 80% of average weekly earnings, whichever is lower. Qualifying small employers benefit from a higher compensation rate of 9%, enabling them to reclaim 109% of most statutory payments (excluding SSP).
Homeworking and Workplace Benefits Tax relief for non-reimbursed homeworking expenses ends from 6 April 2026. Employees can no longer claim the £6 weekly flat rate or actual costs for household bills. In contrast, HMRC has expanded tax- and National Insurance-free reimbursements to cover eye tests and glasses for display screen equipment (DSE) users, seasonal flu vaccinations, and eligible homeworking equipment.
RTI Submission Problems — Incorrect Handling of Payroll IDs A key focus of the bulletin is ongoing RTI errors caused by incorrect Payroll ID handling, which continue to create significant compliance headaches. Employers frequently generate duplicate employments when changing a Payroll ID without properly using the Payroll ID change indicator. This happens when the indicator is not ticked or the old Payroll ID is not provided. HMRC systems then treat the new ID as a fresh employment, resulting in incorrect year-to-date figures, repeated employer queries, and extra manual corrections.
Additional errors arise when employers submit a start date or starter declaration instead of the change indicator for existing employees. This creates a second employment record for the same person. HMRC also reports reconciliation failures from incorrect Full Payment Submission (FPS) fields, such as missing start dates for genuine new hires (which can cause unwanted merging of records) or submitting nil taxable pay in a period while including year-to-date figures.
Reusing Payroll IDs for different employees is another common mistake. This attaches data to the wrong customer record, leading to split RTI submissions, misplaced employment details, disputed charges, and unnecessary correction work.
HMRC Recommendations to Avoid RTI Errors To prevent these issues, employers should:
- Always tick the Payroll ID change indicator when applicable.
- Provide both the old and new Payroll IDs.
- Use a unique Payroll ID for each employee and never reuse IDs from former staff.
- Enter a start date only for new employees and leave it blank for continuing employments.
- Submit correct period and year-to-date taxable pay figures logically.
Other PAYE and Reporting Reminders P11D and P11D(b) forms for the 2025/26 tax year are due by 6 July 2026. Payrolling of benefits registration for 2026/27 closed on 5 April. HMRC is automating National Insurance refund processing for multi-employee claims, with credits applied directly to PAYE accounts. A new credit allocation page launches by the end of April 2026. The official rate of interest remains at 3.75% from 6 April and will be reviewed quarterly.
Employers should review the full bulletin on GOV.UK, update payroll software promptly, and ensure RTI submissions are accurate to avoid penalties and reconciliation issues