Form P11D – the long farewell

Date posted: 22nd Jan 2024

As part of the movement towards tax simplification, HMRC has advised that it will be mandatory to declare benefits-in-kind (BIKs) via the business payroll, from April 2026.

At the moment, the payrolling of BIKs is voluntary and many employers still choose to declare the benefits on forms P11D, to ease pressure on their payroll teams.

There are also some benefits which cannot be payrolled, under the current rules – namely living accommodation and interest-free or low-interest loans. It will be interesting to see how payroll software is developed to accommodate these changes.

These changes will undoubtedly add pressure to payroll teams, who will, from April 2026, not only be dealing with the normal payroll process but will also have to monitor changes in company cars, changes in medical insurance renewals, changes in directors loan balances etc.

In addition, the Class 1A national insurance payable by employers on certain BIKs, is due on 19 July following the end of the tax year. Does this change mean that the Class 1A will be payable monthly at the time the payroll is run?

It is expected that there will be a further announcement on this subject, later in the year, once a consultation has been held.

If you have any queries, please give us a call.


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