If you’re responsible for UK employees but based outside the UK, you may never have heard of “payrolling benefits.” From 6 April 2027, the UK tax authority (HMRC) is changing the way employers must report and pay tax on employee perks – known as benefits in kind (for example, company cars, health insurance, housing, or employee loans).
This page explains what payrolling benefits is, how it works, and how we support overseas employers in getting ready.
In the UK, many employers offer non-cash perks to staff alongside their salary – for example:
These are called benefits in kind. Even though the employee doesn’t receive extra cash, HMRC treats these perks as taxable income.
At the moment, most employers report benefits after the end of the tax year using special forms called P11D and P11D(b).
This means employees are taxed later through adjustments to their tax code – often leading to confusion and unexpected tax bills.
From 6 April 2027, most benefits must be taxed in real time through payroll rather than reported at year-end.
This is called payrolling benefits.
Here’s how it works
The main difference: employees pay tax on benefits as they receive them, not months later.
Some benefits – for example low-interest employee loans or accommodation – may still be reported on P11D forms, although HMRC is expected to bring these into the payrolling system in the future.
We specialise in supporting overseas employers with UK payroll obligations. For payrolling benefits, we will:
With our support, you’ll be fully compliant with HMRC’s new requirements – and your employees will understand exactly how their benefits are being taxed.
Senior Manager
Head of Direct Taxes
