The payrolling of benefits and expenses means the end of the P11D, introduced in phases from tax year 2027/28. HMRC have produced interim guidance which was updated on 04 September 2026.
ICB has written about the phasing of the payrolling of expenses and benefits, announced on 15 June 2026.
- Phase 1 from tax year 2027/28; and
- Phase 2 from tax year 2028/29
The following benefits will be mandated in Phase 1:
- Company cars and fuel;
- Company vans and fuel; and
- Private medical (health and dental etc)
This means the P11D will cease to be an option if these benefits are provided by the employer. Although, if an employer wants to payroll taxable expenses and benefits that are not in Phase 1, this can be done voluntarily, subject to registration which will open in November 2026.
Professionals welcome any guidance on this topic and on 04 September 2026, HMRC updated their interim guidance and legislation page as follows:
- The example for payrolling accommodation for employer-owned property valued under £75,000 has been updated; and
- An example for payrolling for employer-owned accommodation valued over £75,000 (cost basis) has been added
For Bookkeepers
ICB is keen to point out changes to this guidance, especially when they contain relevant examples that help in practice.
However, note that accommodation benefit is not included in either Phase 1 or 2 of payrolling, so these examples are relevant if you want to voluntarily payroll this benefit.