Benefits in kind from April 2027: HMRC’s October update for employers
Published 21 October 2026. HMRC’s new Employer Bulletin puts benefits in kind back on employers’ preparation list. If your business provides company vehicles or medical benefits, now is a useful time to review how information reaches payroll.
Which benefits are in the first phase?
HMRC’s current interim guidance identifies company cars, car fuel, vans, van fuel and employer-provided medical benefits for mandatory payrolling from 6 April 2027. The changes involve reporting Income Tax and Class 1A National Insurance through payroll in real time. Other benefits, including employment-related loans and accommodation, can be payrolled voluntarily under the new arrangements.
A new point for voluntary payrolling
The October bulletin confirms that, from April 2027, voluntarily payrolled benefits must also have their associated Class 1A contributions reported and paid through payroll. Employers cannot payroll the Income Tax while leaving those contributions for a separate year-end report.
Prepare your information and cash flow
Check that benefits providers, HR and payroll can exchange changes promptly. Ask your software provider what will be ready for April 2027 and explain potential tax-code and take-home-pay changes to employees. Budget for the transition: existing 2026/27 Class 1A liabilities can overlap with real-time payments for the new year.
ZipTax’s practical starting point
Create one benefits register with a named owner for each entry. Record the employee, benefit, start or end date and where the supporting information is held. Then arrange a review with your accountant before changing your payroll settings. A clear register makes it easier to identify missing information and discuss the right treatment.
For example, an employer offering a company car and private medical cover can start by bringing the vehicle records and policy documents together. This is a preparation exercise; it does not replace calculating the taxable value of each benefit.
Discuss your 2027 payroll preparation
Contact ZipTax to discuss employee benefits, payroll records and the next steps for your business. This update reflects HMRC guidance checked on 21 October 2026; the detailed guidance is still described as interim.
