How to avoid HMRC hazards

Payrolling benefits-in-kind (BIKs) will become mandatory for all UK employers from April 2026, replacing the current manual system – which uses P11D forms – with real-time information. Once fully embedded, the changes will simplify the entire process, improve accuracy and reduce delays. 

Currently, employers, including those offering salary sacrifice car schemes, either use manual P46/P11Ds forms to report to HMRC or already carry out payroll the benefit via real-time information processes.  

The manual process has often been slow and inefficient. In some instances, it has fallen on the employee to inform HMRC, causing confusion, resulting in inaccurate and inconsistent tax deductions.