In addition to paying employees their basic pay, and other pay-related items such as overtime and bonuses, it is not uncommon for employers to provide benefits and reimburse business expenses. See Simon’s Taxes E4.601.

PAYE regulations can require income tax on benefits in kind to be collected through payroll. HMRC’s phased timetable starts with company cars, car fuel, vans, van fuel and employer-provided medical benefits from 6 April 2027, followed by most remaining benefits from 6 April 2028. Loans, living accommodation and specified employee groups remain outside mandatory payrolling under the announced arrangements. The detailed scope, exclusions and real-time Class 1A NIC rules depend on secondary legislation. For 2026/27, voluntary payrolling and the existing P11D(b) and Class 1A NIC deadlines continue. Class 1A NIC is an employer-only charge on benefits within its scope, however particular items may instead attract Class 1 NIC. See Simon’s Taxes Divisions E4.6, E4.7 and E4.11.

For a client factsheet which summarises the PAYE implications of benefits reporting, see the Client factsheet ― benefits reporting.