Compliance
How the BIK Payrolling Delay Impacts Employers & Payroll Professionals
The UK government has postponed mandatory payrolling of Benefits in Kind (BiKs) from April 2026 to April 2027—here’s what employers, payroll professionals, and employees need to do now to stay compliant.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## What’s Changing and Why It Matters
From **6 April 2026**, most Benefits in Kind (BiKs) will no longer be reported via the P11D system but **mandatorily** processed through payroll software using Pay As You Earn (PAYE) and Class 1A National Insurance Contributions (NICs). However, following stakeholder feedback, this date has been **delayed to 6 April 2027**, giving businesses more time to adapt. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-national-insurance-contributions-on-benefits-in-kind-in-real-time-an-update?utm_source=openai))
Benefits such as **employment-related accommodation** and **interest-free or beneficial loans** will still require reporting under the old system for now; they remain exempt from the mandatory payrolling requirement. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-national-insurance-contributions-on-benefits-in-kind-in-real-time-an-update?utm_source=openai))
## Actionable Steps for Employers
- Begin by **registering** for voluntary payrolling by **5 April 2026** if you want to trial the system during 2026–27. ([gov.uk](https://www.gov.uk/government/publications/agent-update-issue-131/issue-131-of-agent-update?utm_source=openai))
- Review your payroll and HR software to ensure it can handle the expanded data fields required for BiKs. The full payment summary (FPS) needs updates. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-national-insurance-contributions-on-benefits-in-kind-in-real-time-an-update?utm_source=openai))
- Communicate with staff: explain how payrolled BiKs will affect their payslips, and any changes in tax code or NICs. Transparency builds trust. ([icaew.com](https://www.icaew.com/insights/tax-news/2025/may-2025/icaew-welcomes-delay-to-mandatory-payrolling-of-benefits?utm_source=openai))
- Continue using P11D and P11D(b) for accommodation and loans until further guidance is issued. ([gov.uk](https://www.gov.uk/government/publications/agent-update-issue-131/issue-131-of-agent-update?utm_source=openai))
## Employees and Agents: What You Need to Know
- You may see a shift in when and how your benefits tax is paid, with more taken via payroll rather than at the year-end. Be sure to understand your payslip. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-national-insurance-contributions-on-benefits-in-kind-in-real-time-an-update?utm_source=openai))
- If you receive accommodation or loan benefits, you’ll still get a P11D form under current rules; nothing changes yet for these. ([gov.uk](https://www.gov.uk/government/publications/reporting-and-paying-income-tax-and-class-1a-national-insurance-contributions-on-benefits-in-kind-in-real-time-an-update?utm_source=openai))
- Employers should inform staff of any **underpayments or overpayments** and allow flexible arrangements for settling them. Tax codes may be updated to reflect the changes. ([icaew.com](https://www.icaew.com/insights/tax-news/2025/may-2025/icaew-welcomes-delay-to-mandatory-payrolling-of-benefits?utm_source=openai))
## Timeline
| Date | What Happens |
|-------|----------------|
| Before 5 April 2026 | Employers may register for voluntary payrolling |
| 6 April 2026 | Voluntary payrolling begins for most BiKs |
| 6 April 2027 | **Mandatory** payrolling for most BiKs takes effect |
Delaying the mandatory requirement gives employers and payroll professionals more runway to comply, and the soft landing period in 2027–28 aims to reduce the risk of penalties during the transition. ([icaew.com](https://www.icaew.com/insights/tax-news/2025/may-2025/icaew-welcomes-delay-to-mandatory-payrolling-of-benefits?utm_source=openai))