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Putting benefits-in-kind through the payroll from 2026 – Simples!

Shared from Tax Insider: Putting benefits-in-kind through the payroll from 2026 – Simples!
By Ian Holloway, June 2024

Ian Holloway worries whether employers, agents, accountants or bookkeepers will be ready to payroll benefits and expenses from April 2026.  

When HMRC talks of payrolling benefits and expenses (‘payrolling’), it refers to putting the taxable value through the payroll when the employee is paid, thereby avoiding declaring items on form P11D. The benefit is removed from the tax code, but a taxable non-payable value is processed in the payroll.  

It really could not be easier.  

Example: Payrolling medical benefit 

The payroll department knows at the start of the tax year that Jane’s single-person medical benefit is £1,200 per annum.  

On a monthly payroll, this is processed as a notional item of £100 per payday (£1,200/12). 

Payrolling has been on a voluntary basis for some time,

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