HMRC, phased from 6 April 2027
Is the P11D abolished in 2027?
Mandatory payrolling starts 6 April 2027, a year late, in two phases. Phase 1 (company cars, car fuel, vans, van fuel, medical benefits) is payrolled in real time. Most others follow in April 2028; loans and accommodation stay voluntary.
Question 1
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Benefit by benefit: how reporting changes in 2027 and 2028
Last updated
What moves into real-time payroll reporting, when, and what stays on the P11D. Phase 1 is a short list, which is the point most summaries get wrong.
| Benefit | How it is reported now | From 6 April 2027 | From 6 April 2028 |
|---|---|---|---|
| Company car | P11D after year end, or payrolled if registered before 6 April 2026 | Payrolled through the FPS, mandatory | Payrolled, mandatory |
| Car fuel | P11D after year end, or payrolled if already registered | Payrolled through the FPS, mandatory | Payrolled, mandatory |
| Van, and van fuel | P11D after year end, or payrolled if already registered | Payrolled through the FPS, mandatory | Payrolled, mandatory |
| Employer-provided medical benefit | P11D after year end, or payrolled if already registered | Payrolled through the FPS, mandatory | Payrolled, mandatory |
| Most other taxable benefits and expenses | P11D after year end, or payrolled if already registered | Unchanged: P11D, or voluntary payrolling | Payrolled, mandatory |
| Employment-related loans | P11D after year end (cannot be payrolled today) | Voluntary payrolling only, registration required | Still voluntary |
| Living accommodation | P11D after year end (cannot be payrolled today) | Voluntary payrolling only, registration required | Still voluntary |
| Class 1A National Insurance on the above | P11D(b) by 6 July, paid by 22 July | Reported and paid in real time for mandated benefits | Real time for mandated benefits; P11D(b) for the rest |
- Mandatory payrolling of benefits in kind starts on 6 April 2027 and is phased: phase 1 covers company cars, car fuel, vans, van fuel and employer-provided medical benefits, and phase 2 from 6 April 2028 covers most remaining benefits.
- Employment-related loans and living accommodation are excluded from both phases and remain voluntary, so employers providing them will still file a P11D and P11D(b) unless they register to payroll them.
- Employers do not need to register to payroll the benefits that become mandatory in April 2027; registration is needed only for non-mandatory benefits, through a service opening in November 2026 with a deadline of 5 April 2027.
How this was compiled, and how to cite it
Compiled from HMRC's interim guidance 'Mandatory payrolling of benefits in kind and expenses' (published 26 November 2025, updated 31 July 2026) and the policy paper 'Mandatory reporting of benefits in kind in Real Time Information (RTI) from April 2027', both on gov.uk, as at the updated date above. HMRC has confirmed that secondary legislation setting out the detailed scope, exclusions and operational rules will be introduced at Budget 2026, so the phase 2 list in particular may be refined. No penalty or cost figures are invented here: the penalty position quoted comes from HMRC's own penalties and interest chapter.
Cite this page
“Benefit by benefit: how reporting changes in 2027 and 2028”, P11D Changes, https://p11dchanges.co.uk/ (updated 2026-08-14). Compiled from HMRC's interim guidance 'Mandatory payrolling of benefits in kind and expenses' (published 26 November 2025, updated 31 July 2026) and the policy paper 'Mandatory reporting of benefits in kind in Real Time Information (RTI) from April 2027', both on gov.uk, as at the updated date above. HMRC has confirmed that secondary legislation setting out the detailed scope, exclusions and operational rules will be introduced at Budget 2026, so the phase 2 list in particular may be refined. No penalty or cost figures are invented here: the penalty position quoted comes from HMRC's own penalties and interest chapter.
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Related guides
Each one cites where its numbers come from.
What this checker covers
The 6 things it checks
- Which benefits are mandated from 6 April 2027 and which wait until April 2028
- Employment-related loans and living accommodation, which stay voluntary
- Whether you need to register (for the mandated benefits, no)
- What happens to the P11D and the P11D(b), and to Class 1A National Insurance
- The registration window that closed on 5 April 2026 and reopens in November 2026
- Based on HMRC's interim guidance and the July 2026 policy paper; detailed scope comes in secondary legislation at Budget 2026
P11D Changes is an information site. It is not affiliated with HM Revenue and Customs or any government department, and nothing here is tax advice. HMRC's detailed scope, exclusions and operational rules are due in secondary legislation at Budget 2026: confirm the current position on gov.uk before acting.
Straight answers
When does the P11D change take effect?
6 April 2027 for phase 1, which covers company cars, car fuel, vans, van fuel and employer-provided medical benefits. Phase 2 follows on 6 April 2028 for most remaining benefits in kind. Employment-related loans and living accommodation are excluded from both and stay voluntary.
What is the P11D replacement in 2027?
Real-time reporting through payroll. From 6 April 2027 company cars, car fuel, vans, van fuel and medical benefits go on the Full Payment Submission, not a P11D. Income Tax and Class 1A National Insurance are calculated each pay period. Most other benefits follow on 6 April 2028. The P11D survives for employment-related loans, living accommodation and anything else outside payroll.
Which benefits must be payrolled from April 2027?
Company cars, car fuel, vans, van fuel and employer-provided medical benefits, together with taxable expenses. They are reported through the Full Payment Submission with Income Tax and Class 1A National Insurance calculated in real time.
Do employers have to register for mandatory payrolling?
No. HMRC has confirmed employers will not need to register in order to payroll the mandatory benefits from April 2027. Registration is required only for voluntary payrolling of non-mandatory benefits, through a service opening in November 2026 with a 5 April 2027 deadline.
What happens to the P11D(b) and Class 1A National Insurance?
For mandated benefits, Class 1A is reported and paid in real time through payroll from April 2027. Where you still report at year end, such as loans and accommodation, the P11D(b) and the 6 July and 22 July deadlines continue. So does the £100 per 50 employees monthly late filing penalty.
Will employees pay more tax because of payrolling?
No more tax overall, but the timing changes: tax on a benefit is paid in the year it is received rather than in arrears through a tax code adjustment. HMRC will remove payrolled benefits from tax codes ready for April 2027, though underpayments from earlier years stay in the code, which can make it look like double taxation.
Are penalties being charged during the first year?
HMRC has said that for 2027 to 2028, inaccuracy penalties will not be charged for errors related to mandatory payrolling in RTI returns unless there is evidence of deliberate non-compliance. Existing late filing and late payment penalties still apply, and full penalties and interest resume from 2028 to 2029.
Sources
This site's own datasets, every figure quoted from its source and dated:
- The median published figure in the Benefits in Kind Population is 3,910 GBP across 3 sources' own pages (range 3,330 to 4,750 GBP), read 11 November 2026.
- The Bik Rate Table carries 17 published figures read from 2 sources' own pages; the 11 published figures given without a breakdown run from 7 to 27 pence, read 7 November 2026.
- The median published figure in the Payroll Provider Bik Index is 18 GBP across 5 sources' own pages (range 12 to 43 GBP; 6 sources publish a figure, some priced per payslip per month), read 11 November 2026.
- The Payrolling Mandate Ledger carries 3 published figures read from 3 sources' own pages, from 4 to 50 percent, read 7 November 2026.
- HMRC, mandatory payrolling of benefits in kind and expenses: interim guidance
- HMRC, the phased introduction of mandatory payrolling
- HMRC policy paper, mandatory reporting of benefits in kind in RTI from April 2027
- gov.uk, how to use the payrolling benefits and expenses online service
- gov.uk, expenses and benefits for employers: deadlines
- gov.uk, expenses and benefits A to Z
Find out what actually changes for you
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