Key Compliance Changes Employers Can’t Miss
1. Payrolling Benefits in Kind (BiKs) Moves to Mandatory
- Voluntary registration for payrolling BiKs ends 5 April 2026. Employers must register before the start of the 2026-27 tax year if opting for voluntary payrolling. (gov.uk)
- From April 2027, most benefits and expenses in kind will need to be payrolled mandatorily instead of being reported through annual returns. (gov.uk)
2. Student Loan Plan 5 Requirements
- A new student loan repayment plan, Plan 5, starts from 6 April 2026. Employers must begin deductions for Plan 5 when workers’ earnings exceed the threshold, defaulting to this plan if unsure. (gov.uk)
- Key thresholds from April 2026: Plan 1 £26,900; Plan 2 £29,385; Plan 4 £33,795; Plan 5 £25,000; Postgraduate loan £21,000. Repayment rates of 9% or 6% remain. (gov.uk)
What Employers Should Do Now
- Update payroll software: Ensure systems can handle the changes in BiK payrolling deadlines and student loan plan identification.
- Communicate to employees: Inform staff about the coming removal of voluntary payrolling and how their loan repayments might change under Plan 5.
- Review contracts and HR policy: Especially sections concerning benefits, expense claims and BiKs; ensure policies refer correctly to the changes.
Examples to Show Impact
- An employer who provides a company car or subsidised accommodation under BiK must decide by 5 April 2026 whether to register voluntarily; failing to do so will require them to shift to mandatory payroll reporting in 2027.
- An employee earning £27,000 per year under a new contract falls under Plan 5 from April 2026, so the employer must start deductions at 9% on earnings above £25,000.
Risks of Non-Compliance
- Missing the 5 April 2026 voluntary payrolling registration can lead to disruption in benefit reporting.
- Failing to adopt Plan 5 correctly may lead to deductions being incorrect, possible back pay or HMRC penalties.
- Inaccurate PAYE codes or tax codes because of incorrect student loan plan could upset employees and require corrections later.
Actionable Checklist Before April 2026
| Task | Who’s Responsible | Deadline |
|---|---|---|
| Register to voluntary payroll BiKs if that's your choice | Payroll/HR | by 5 April 2026 |
| Update payroll software and providers | Finance dept / providers | Before start of 2026-27 tax year |
| Train HR and line managers | HR leads | ASAP |
| Ensure all employees know which student loan plan applies | HR / Payroll | Before 6 April 2026 |
| Adjust policies and reporting templates accordingly | HR / Legal | Before 6 April 2026 |
These changes tighten compliance cycles—preparation now avoids misreporting and employee dissatisfaction. For the best employer practice, build the changes into your payroll calendar for late Q1-2026.