COMPLIANCE
2. Review the updated legislation and guidance issued by HMRC to check if any changes are needed to your plan. 3. Prepare employee communications about the changes to the reporting of BiKs. 4. Continue training payroll staff on the upcoming changes. October - December 2026 1. Finalise system upgrades and ensure all payroll staff are fully trained. Prepare for full implementation. 2. Start communicating changes to employees, explaining how the new system will affect their pay and benefits. 3. Consider registering for voluntary payrolling for loans and accommodation for 2027/28. January - March 2027 1. Ensure you have all the information needed to report benefits and making good. 2. Undertake the calculations needed for the first pay period. 3. Begin full implementation of mandatory payrolling for BiKs.
January - March 2026 1. Consider whether you want benefit providers to only provide changes to benefits each pay period or if you want a full report. 2. Think about whether any changes are needed to your contracts with benefit providers to ensure they provide information on a pay period by pay period basis or where you require renewal date changes. 3. Review where you think you’ll be on data flow in real time and reporting to payroll within the cut off dates for processing. 4. Conduct a gap analysis to identify areas needing improvement. Develop a detailed implementation plan, including timelines and responsibilities. 5. Register for voluntary payrolling if you’ve decided to implement for one or certain benefits ahead of mandatory payrolling in April 2027. “It may be worth registering to payroll benefits on a voluntary basis from 6 April 2026 or starting to engage early. Doing so could help avoid a rush for skills as the deadline approaches”
and providers, especially if data is spread across multiple systems. 5. Consider whether, in future, you want to adjust benefit renewal dates or when the benefit window closes, to make it easier for you to report in real time. 6. Do you need specialist third-party support in complying with the new rules? For example, it may be worth registering to payroll benefits on a voluntary basis from 6 April 2026 or starting to engage early. Doing so could help avoid a rush for skills as the deadline approaches. October - December 2025 1. Engage with your payroll software provider to ensure systems can accommodate the new data fields required for BiKs reporting (https://ow.ly/ T5v650W1qI9) and to confirm when they’ll be available. Also, determine how the software will require information to be provided and if it can deal with calculations and recalculations, for example, where the 50% rule kicks in. 2. Engage with a flexible benefit software provider to ensure systems can accommodate the new data fields required for BiKs reporting and when these will be available. Also discuss whether they envisage getting you the required information on a pay period by pay period basis. 3. Consider what extra costs might be charged by providers. How does this compare to previous costs for P11Ds, for example – is the budget available? 4. Consider how the benefit calculations will be prepared and by who. Will they have all the information needed? For example, car and fuel benefits will need to be calculated in accordance with the tax legislation, and you may need to consider the optional remuneration arrangement (‘OpRA’) rules. 5. Consider how you’ll deal with any ad hoc or centrally provided benefits which need reporting. 6 . Consider what you want denoted on payslips and check your software can accommodate this. 7. Discuss with benefit providers the information they’ll be giving, and if it’s going to be in a format that can be imported directly into payroll. It’s important to ensure data management is robust when handling real-time reporting requirements. 8. Consider if you want to voluntarily payroll one or all benefits from April 2026.
Tax year 2027/28
April - June 2027 1. Monitor the process closely and address any issues promptly. 2. Review initial implementation results and make necessary adjustments. Continue to support employees through the transition. July - September 2027 1. Conduct a mid-year review to ensure compliance and identify any remaining challenges. Provide additional training if needed. October – March 2028 1. Prepare for year-end reporting and reconciliation. 2. Ensure all BiKs are accurately reported and taxed. n Conclusion The mandatory payrolling of BiKs from April 2027 represents a significant shift in how employee benefits will be managed and reported. By following a structured plan and preparing well in advance, employers can ensure a smooth transition to the new requirements.
Tax year 2026/27
April - June 2026 1. As you’re preparing the 2026/27 P11D information or reconciliations, review whether your project plan needs any adjustments. 2. Revisit your implementation plan. 3. Start training payroll staff on the upcoming changes. 4. Consider conducting a pilot run of information gathering for a pay period by pay period basis, or a dummy run of pulling information together for 2026/27 ahead of mandating to iron out any data problems. Begin initial testing to ensure accuracy and compliance. 5. Adjust processes as needed. July - September 2026 1. Continue testing and refine processes based on feedback.
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| Professional in Payroll, Pensions and Reward |
Issue 112 | July-August 2025
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