Key Compliance Changes Introduced 6 April 2026
- Expanded exemptions for employer reimbursements. Costs of eye tests (for Display Screen Equipment users), certain homeworking equipment, and seasonal flu vaccinations become exempt from Income Tax and National Insurance when reimbursed — aligning reimbursements with direct provision. (gov.uk)
- Statutory Sick Pay (SSP) overhaul. The lower earnings limit has been removed: employees are now eligible regardless of income. The waiting period has been eliminated: SSP is owed from the first full day of absence. These apply across the UK. (gov.uk)
- Construction Industry Scheme (CIS) returns. Contractors are legally obliged to file CIS returns every month, including nil returns when no subcontractors are used. Late-filing penalties reinstated except for first fixed penalty; further penalties escalate if delays continue. (gov.uk)
- Small Employers’ Relief (SER) compensation rate rises to 9% for employers paying ≤ £45,000 in Class 1 NICs, starting 6 April 2026. (gov.uk)
Practical Compliance Tips
- Ensure payroll software is updated to apply the correct exemptions and adjustments. Document all reimbursements and ensure policy covers eligibility requirements. |
- Train HR/payroll teams so SSP changes are understood, so that leave records and payroll calculations are accurate from day one. |
- Contractors should review month-by-month CIS return obligations; employers working with contractors must ensure their partners comply. |
- Small employers must check eligibility for SER and factor 109% reclaim into budgeting. |
Compliance Example
A tech company reimburses an employee £80 for a home-working monitor stand. After 6 April 2026, so long as the item meets qualifying criteria, that reimbursement is exempt from tax and NIC. But reimbursements before that date or for non-qualifying equipment may still be taxable. |
Common Compliance Misunderstandings
- Thinking all homeworking or health-related reimbursements are exempt regardless of timing or type. |
- Assuming SSP applies from day four as before: for absences starting 6 April 2026 or later, the first day counts. |
- Not submitting nil CIS returns thinking ‘nothing to report’ means ‘no report required’ — but nil returns are mandatory. |
Bottom Line
Employers must act now: ensure policies, systems, and staff are up to date to apply new regimes correctly. Missteps can lead to payroll errors, penalties, or unnecessary tax exposure.