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are off sick on or after 6 April will now qualify for SSP from that date. 2. Anyone serving waiting days on 6 April will begin receiving SSP from 6 April onwards. 3. Employees earning between £125.00 and £154.05 per week who were already receiving SSP before 6 April will be transitionally protected, ensuring they don’t see a drop in their SSP rate. These employees will continue to receive the flat rate of £123.25 until: l they return to work l they exhaust their SSP entitlement, or l their employment ends. SSP calculation rules HM Revenue and Customs (HMRC) has also confirmed how AWE and SSP should be calculated under the new system: 1. For employees earning below the flat rate, SSP will be based on 80% of AWE, calculated over the relevant 8-week reference period. 2. All SSP amounts must be rounded up to the nearest whole penny. 3. For linked periods of incapacity (within 56 days of each other), the AWE calculated for the initial period will continue to apply for all subsequent linked periods. What employers and agents need to do All employers and payroll agents should ensure their sick pay policies and payroll software are fully updated in line with the new rules from 6 April. If you or your clients operate company sick pay schemes, review policy wording carefully, particularly where entitlement to company sick pay is dependent on an employee’s eligibility for SSP, to ensure the rules remain aligned and compliant. Mandatory payrolling of benefits in kind (BiKs): April 2027 From 6 April 2027, the payrolling of most BiKs will become mandatory for all employers, marking a significant shift away from the long-standing P11D end-of-year reporting process. However, even if you already payroll benefits voluntarily, you still have work to do. One essential message for employers is that, if you’re voluntary payrolling today, this doesn’t mean you’re automatically compliant for mandatory payrolling from April 2027. You’ll still need to update processes and system configurations to meet the new requirements.
Under current voluntary arrangements, employers add a taxable value to each pay period to collect the correct income tax across the year. But under the new rules, each benefit or taxable expense will need to be reported through a specific real time information (RTI) data field, replacing the broader and more flexible approach we have available today. Draft guidance from HMRC confirms that RTI fields will expand and broadly align with existing P11D categories, enabling real-time tax collection on all reportable benefits. The interim guidance and legislation define the additional RTI fields that are ‘likely’ to be required on full payment submission (FPS) returns, reinforcing the need for employers
update process to assist in correcting underpayments / overpayments, where benefit values were estimated or incorrect in-year. 5. A relaxed penalty regime will apply in 2027/28, with penalties only being charged where non-compliance is deliberate, before full enforcement begins in 2028/29. Preparation: what employers should do now To avoid disruption, employers should use the current transition period to: l review payroll software and confirm that providers will support the expanded RTI fields and categorisation l engage with benefits providers early to ensure they understand the new real-time reporting obligations and the importance of supplying timely and accurate benefit values l audit current internal processes to ensure they fit with future requirements l audit the accuracy of current benefits data held l prepare employees for changes, by promoting education and understanding of how the changes may affect them, particularly those who may see more frequent adjustments to taxable pay as benefits are processed in real-time.
to check software readiness early. You can see this guidance here: https://ow.ly/AMEO50YiHUQ.
What will change from April 2027? Evidence from HMRC and tax bodies summarises the key changes for employers: 1. Real-time reporting of all BiKs (except beneficial loans and accommodation, which will initially be optional) will be required on the payroll FPS from April 2027. 2. Employers must calculate the annual cash equivalent of each benefit at the start of the tax year and apportion this across relevant pay periods. 3. Additional RTI fields will mirror P11D and P11D(b) reporting categories, increasing both the volume and specificity of data captured through payroll reports. 4. HMRC will introduce an end-of-year
Sarah Smith ChMCIPPdip
CIPP Policy and Research Officer
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