HMRC reopens voluntary payrolling of benefits, with new rules from 6 April 2027

What changed

HMRC updated its guidance on 5 November 2026: the voluntary payrolling service has reopened for registrations and cancellations, living accommodation and loans can now be payrolled, and guidance on how voluntary payrolling will work from 6 April 2027 has been added.

Up to and including 5 April 2027, employers already payrolling benefits follow the existing rules: add the cash equivalent to pay, deduct Income Tax through payroll, work out Class 1A National Insurance contributions and complete form P11D(b).

From 6 April 2027, for benefits registered for voluntary payrolling, employers must deduct Income Tax and account for any associated Class 1A National Insurance contributions in real time using payroll software, and will not need to report payrolled benefits on forms P11D and P11D(b). Registration must be made before the start of the relevant tax year. Company cars and fuel, vans and fuel, and medical insurance cannot be registered through this service and must be reported through payroll software.

HRjoy’s view

Payrolling benefits removes the year-end P11D workload and keeps employees' tax codes simpler, but it moves the work into each pay run. Employers should check their payroll software and processes well before April 2027, and agree who owns the benefit values each month. A short note to affected employees explaining the change avoids surprises on payslips.

Source

• How to use the voluntary payrolling benefits and expenses online service · GOV.UK

General information for employers in Great Britain, not legal advice.