HMRC’s interim guidance on the payrolling of benefits and expenses was updated on 04 September 2026 and announces the exclusion of one category of employee.
The phasing of the payrolling of expenses and benefits starts with Phase 1 in April 2027. Ahead of this, HMRC have announced that employees who are globally mobile (Globally Mobile Employees (GMEs)) and may receive benefits from more than one country will be excluded. This means the current P11D and P11D(b) process can continue for this category of employee.
GME payrolls are complicated to process, as some employment income may not be fully taxable in the UK. So, whilst it is good to have this confirmation, the announcement opens two issues:
1. This will not be a legislative exclusion and employers will have to voluntarily exclude these individuals on an HMRC service to be launched in November 2026; yet
2. We do not have a definition of who meets the criteria of being a GME
For Bookkeepers
To be clear, this does not change the fact that Phase 1 will go ahead in April 2027. However, if the employer chooses, this category of employee can be excluded, providing the employer uses the new exclusion service from November 2026. If they are not excluded, the employer will be mandated to payroll the benefits in Phase 1.
As part of the payrolling of expenses and benefits journey, ICB will keep members updated with the voluntary exclusion route and, importantly, the definition of an employee that HMRC class as globally mobile.
There are other categories of employee where payrolling may prove to be an unworkable administrative burden. Therefore, we wonder if this will be the first of several categories of employees that have to be manually excluded from mandation in April 2027.