From 6 April 2027, most BIK must be reported and taxed through payroll, rather than via annual P11D submissions. Maryann explains the benefit of early adoption.
Getting payroll right matters — act early, be prepared, and avoid last-minute pressure. The benefits of early adoption are:
Reduces risk
- Testing payrolling early gives you a full tax year to identify and fix any issues in payroll calculations, reporting, or employee communication.
- Reduces the risk of payroll errors and HMRC penalties once the process becomes mandatory.
- You’ll avoid last-minute system changes in 2027, when software support and HMRC will be in high demand.
- Clean, accurate benefit data now means a smoother switch later.
Improves accuracy & compliance
- Real-time reporting keeps tax deductions accurate and aligned with HMRC expectations.
- Immediate updates if benefits start, stop, or change mid-year.
- Early adoption allows you to integrate HR, payroll, and benefits systems before it’s compulsory.
- Demonstrates proactive compliance— useful if HMRC reviews your processes.
Improves the employee experience
- Employees see the value and tax on their benefits clearly on each payslip.
- Fewer queries about P11D forms or unexpected tax code changes.
- Builds trust and transparency between payroll and employees.
Having an early conversation with your payroll department or a trusted advisor to plan your migration is strongly recommended. Preparing ahead will make the transition smoother and ensure your payroll remains accurate and compliant.
If you’d like to speak with someone about how these changes could affect you, we’d be happy to help.
Contact Maryann Hunter for more information by emailing payroll@randall-payne.co.uk or call 01242 776000.
