TECHNICAL | 23
Payrolling of benefits to become mandatory In January 2024, a ministerial announcement informed us that the payrolling of benefits and taxable expenses would be made mandatory from April 2026. This would also mandate the payment of Class 1A NICs in real-time. This is a huge policy change and something the CIPP isn’t taking lightly. A little delay along the way… Then, in April 2025, a policy paper (https://ow.ly/ qHMB50YXzeX) was published announcing HMRC’s delay to mandating, pushing the date back to April 2027. This was a welcome relief for most people, considering how little detail had been shared up to that point. Following the announcement of the delay, the CIPP’s policy team set up a new industry working group, bringing together: l The Chartered Institute of Taxation (CIOT) l The Association of Taxation Technicians (ATT) l the Business Application Software Developers Association (BASDA) l the British Computer Society (BCS).
This was intended to ensure an ‘industry voice’ is represented in relation to HMRC’s next steps on the payrolling of BiKs. The purpose is to enable a non-HMRC-facilitated discussion to determine what the payroll, tax and software industries require from HMRC and the Government to support implementation. This work aligns with and complements activity undertaken by representatives of the working group in their capacity as members of the Employment and Payroll Group (EPG). The group seeks to provide guidance and direction to HMRC, other Government bodies and Ministers on what’s required from industry to enable progress. This will support the smooth implementation of mandatory payrolling of BiKs from April 2027. The policy team maintains strong relationships with several senior HMRC officials. During a catch-up with Cerys MacDonald, HMRC’s Director of the Individuals Policy Directorate, the CIPP’s former Policy and Advisory Lead, Samantha O’Sullivan, raised the topic of the working group and its desire for HMRC to work in a co-design capacity with industry to meet its objectives and purpose. Cerys responded positively, encouraging continued engagement with different HMRC departments wherever possible. Alongside the co-design request, it was also suggested that HMRC could consider seconding an expert into industry teams, enabling the pay profession to provide support from ‘inside the tent’. Following that conversation, in November 2025, Mathew Akrigg (who was, at the time, a Policy and Research Officer and who is now our Policy and Advisory Leader) from our policy team was seconded into the HMRC team responsible for leading on the payrolling of benefits to help ensure its successful implementation. This is an important recognition of the CIPP’s
contributions to HMRC policy across the UK. What’s next? As the move towards mandatory payrolling of BiKs approaches, the CIPP urges employers and agents not to underestimate the preparation required. Currently, under the voluntary scheme, the taxable value is added to the payroll system each pay period, to ensure the correct amount of income tax is paid on the relevant benefit or taxable expense throughout the year. However, when we move to the mandatory scheme, a taxable value will still need to be added, but each benefit or taxable expense will also need to be connected to a specific real time information (RTI) field / data item. You can review the RTI fields ‘likely’ to be required, here: https://ow.ly/f3xg50YXzbi. Starting preparations early is vital to ensure a smooth transition and minimise disruption for both employers and employees. Take the time to review your systems capability, audit the benefit data you currently hold and begin those all-important employee communications. Start conversations with your benefit providers about the importance, and future impact, of accurate and timely information, as this will be key for successful real‑time reporting of benefits come April 2027. As we move towards a more streamlined, real-time approach to the reporting of benefits, now is the perfect time to prepare, review processes and start planning for what’s next.
Georgie Ward MCIPPdip CIPP Policy and Research Officer
“The secondment opportunity was a fantastic representation of the relationship the CIPP has built with HMRC over the years. Unfortunately, all good things must come to an end and I’ve now returned to the CIPP as the Policy and Advisory Leader. My time at HMRC was a great learning experience and will make me and the CIPP better stakeholders going forward. “We’ll continue to work with the policy team at HMRC on all things payrolling, making sure the industry voice is heard and mutually beneficial outcomes can be found. It’s not the end of my relationship with the income tax team there, it’s just taking a different shape.” Mathew Akrigg MCIPPdip MAAT Policy and Advisory Leader
Made with FlippingBook - Online magazine maker