Weybridge accountancy firm TWP is advising employers not to be complacent following HM Revenue and Customs’ (HMRC) decision to delay mandatory payrolling of Benefits in Kind (BIK) until April 2027.

The new rules will eventually remove the need for annual P11D forms and instead require employers to process BIK directly through payroll on a monthly basis.

Although the move is designed to simplify reporting, it will demand changes to payroll processes, software systems and employee communication for businesses across the UK.

“We’re encouraging businesses to use this extra time wisely,” said Emma Strugnell, Senior Payroll Manager at TWP.

“I understand that the rollout delay may make it tempting to put off your own plans to adjust your payrolling processes, but it would be a mistake to wait until 2027.”

Like with many changes to regulations made by HMRC, failure to comply with the new payrolling BIK will result in penalties. However, the exact details of this are still to be reported.

“Employers who want a smoother transition need to start reviewing their payroll systems, mapping out the current benefits they offer and planning how to explain the changes to their staff as early as possible.

“The shift from one annual payment to monthly deductions will also inevitably have an impact on cash flow, so it is best to tackle these issues now rather than leave them until the deadline, where the pressure could lead to costly mistakes.”

Voluntary adoption of payrolling BIK will remain an option ahead of 2027, just as it has been since 2016, allowing businesses to road-test the process in advance.

“Businesses that plan early will avoid last-minute disruption and may even find opportunities to strengthen payroll systems and improve employee engagement,” added Emma.

To support employers with the transition, TWP has developed a guide outlining the upcoming changes and the steps they need to take. This is available via the firm’s website.

The firm’s payroll specialists are also on hand to help businesses train their teams and provide ongoing outsourced payroll support.

For further information on payrolling BIK or assistance with your payroll, please visit www.twpaccounting.co.uk or call 01932 704700.