The payrolling of benefits and expenses means the end of the P11D. The move to payrolling is going be phased, starting in April 2027. HMRC have indicated the new RTI data fields that will be required.
ICB has written about the welcome 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;
- Private medical (health and dental etc); plus
- The real-time calculation and payment of Class 1A NICs
This means the P11D ceases to be an option if these benefits are provided by the employer. Although, if an employer wants to payroll benefits and taxable expenses that are not in Phase 1, this can be done voluntarily, subject to registration which will open in November 2026.
On 31 July 2026, HMRC updated their interim guidance and legislation to detail the new RTI fields necessary - fields software products must include and payroll professionals have to populate. On 06 August 2026, these were provided to software developers as draft RTI Data Items Guide for 2027/28. This included the necessary new fields plus changes to existing fields.
For Bookkeepers
ICB suggests this information is good for software developers to plan for their products to be updated for tax year 2027/28. However, as always, not all software products will operate the same. So, when the RTI fields are finalised and legislation and guidance is in place, it will be important to contact your developer to determine their expectations on the data that needs to be entered and the calculations that will be performed.
For example, with medical benefit, there is a field ‘Cost to employer or amount forgone’. Will this require the per-pay-period value to be entered or an annual value which will be divided by the pay frequency? This is very much the same consideration for the field ‘salary’, where some products will require an annual value but others will require a per-pay-period value. Or it could be that the user is able to define what data is entered.