04:05 EMEA
for the mandatory implementation,
The technical note outlines a timeline for the mandatory implementation, including the expected publication date of the draft legislation and further guidance for consultation in autumn 2025.
including the expected publication date of the draft legislation and further guidance for consultation in autumn 2025. With updated legislation and guidance to be released in July 2026. In the meantime, the technical note does provide further clarity on what will be required, giving employers sufficient, in many cases, information to meaningfully start preparation plans. Key areas highlighted include: Registration requirements: There will be no need to register for mandatory payrolling of benefits, but registration will be required for voluntary payrolling before the 2027/28 tax year. In anticipation of mandatory payrolling, HMRC will remove BIK from employees’ PAYE codes for 2027/28 so that they are not taxed twice.
and divide them by the number of relevant pay periods in the tax year for each employee. The resulting amount for each pay period will be subject to Income Tax, similar to regular earnings, and will also be liable for Class 1A National Insurance Contributions (NICs). This amount must be reported alongside employee earnings in each pay period. If the BiK value is unknown at the start of the year, employers should estimate the taxable value and divide it by the number of relevant pay periods. Although HMRC do acknowledge that there 38 I 04:05
may be instances where it is only discovered after the tax year has begun that an employee has received a BiK. In such cases, the BiK should be reported as soon as possible in the remaining pay periods for that tax year. Earlier submissions do not need to be amended, provided the BiK is reported throughout the remainder of the relevant tax year. Any changes, however, should be actioned in real time. Key Points from the Technical Note
The technical note outlines a timeline
GLOBAL PAYROLL MAGAZINE ISSUE 12
Made with FlippingBook - Share PDF online