Compliance
How Real-Time BiKs Reporting Will Affect UK Employers from April 2026
With mandatory real-time reporting of Benefits-in-Kind (BiKs) coming in April 2026, UK employers need to understand new obligations and operational changes.
By NomadicTax Research Team • 5-8 min read • April 15, 2026
## What’s Changing
From **6 April 2026**, most Benefits-in-Kind (BiKs) (excluding employment-related loans and accommodation) must be reported in **real time via payroll software**. Employers who previously could voluntarily report will no longer have that option for future tax years. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-nics-on-benefits-in-kind-in-real-time/confirming-plans-to-mandate-the-reporting-of-benefits-in-kind-via-payroll-software-from-april-2026?utm_source=openai))
Also from that date, employers who cease trading mid-year will be allowed to submit **paper P11D and P11D(b) returns** if done mid-year, rather than being forced into mandatory e-filing. ([gov.uk](https://www.gov.uk/government/publications/minor-changes-to-employer-provided-benefits-policy-and-administration/changes-to-employer-provided-benefits-policy-and-administration?utm_source=openai))
## Why It Matters
* **Compliance risk**: Failing to report BiKs in real time when required may lead to penalties or incorrect payroll deductions. Employers must ensure payroll software is up to date and used correctly.
* **Administrative workload**: Transitioning from end-of-year P11D returns to in-year payroll submissions requires changes in internal record keeping, vendor / supplier invoice timelines, and coordination across departments.
* **Employee transparency**: Employees may receive BiKs entries sooner and have greater visibility of taxable benefits.
## Action Steps for Employers
| Task | What to Do | Timeline |
|------|-------------|----------|
| **Software readiness** | Confirm payroll software supports real-time BiKs reporting and Class 1A NICs calculation. If not, liaise with the vendor ASAP. | By early 2026, ahead of April 2026.
| **Data collection improvements** | Develop processes to ensure benefits-in-kind values (e.g. cars, fuel, health insurance) are known in-year, including dealing with third-party suppliers and delayed invoices. | Continuous now through early 2026.
| **Employee communication** | Inform staff about which benefits will now show via payroll, potential tax deductions, and timing of changes. | Before the start of the 2026-27 tax year.
| **Internal training** | Train payroll team, finance, HR on the detailed changes, particularly handling end-of-year adjustments. | Q1-Q2 2026.
## Example Scenario
A company provides company cars and health insurance to employees. Under current rules, the value of these benefits is declared on P11D return after tax year end. From 6 April 2026:
* Company must calculate BiK values in-year via payroll software. If health insurance invoice arrives late, an estimated value may need end-of-year adjustment.
* Car benefit and fuel benefit must be included in Full Payment Submission (FPS), taxes and NICs handled in real time.
* The payroll department must ensure that staff have necessary data and that software is configured with correct CO2, emissions, electric car status, etc.
## Pitfalls and Considerations
* Accommodation and employment-related loans will initially remain outside the mandatory real-time requirement, though future mandatory inclusion is expected. Monitoring for further guidance is essential. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-nics-on-benefits-in-kind-in-real-time/confirming-plans-to-mandate-the-reporting-of-benefits-in-kind-via-payroll-software-from-april-2026?utm_source=openai))
* Penalties reviewed: HMRC expects an adjustment period from April 2026 to April 2027 for penalties as stakeholder groups adapt. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-nics-on-benefits-in-kind-in-real-time/confirming-plans-to-mandate-the-reporting-of-benefits-in-kind-via-payroll-software-from-april-2026?utm_source=openai))
* Timing of registrations: employers must register for optional or voluntary BiKs payrolling before requirements take effect. Post-6 April 2026, voluntary registration will close for certain BiKs. ([gov.uk](https://www.gov.uk/government/publications/minor-changes-to-employer-provided-benefits-policy-and-administration/changes-to-employer-provided-benefits-policy-and-administration?utm_source=openai))
## Summary
Real-time BiKs reporting marks a significant enforcement of payroll compliance in the UK. While it will increase administrative demands, those employers who plan ahead—updating systems, refining internal processes, and communicating with employees—will be best positioned to make the transition smoothly.