HMRC has clarified how employers can handle benefits in kind for globally mobile employees as mandatory payrolling is introduced from April 2027.
Under the new rules, most benefits in kind will have to be reported through payroll rather than on annual P11D forms. The first phase, starting on 6 April 2027, covers company cars, vans, fuel and medical benefits. Other benefits will generally follow from 6 April 2028, although loans and employer-provided accommodation are excluded and remain voluntary.
HMRC has now confirmed that employers will be able to choose to exclude globally mobile employees from mandatory payrolling from 6 April 2027. A new online service is expected to be launched in November 2026 for employers to choose this option. Where globally mobile employees are excluded, employers should continue using the existing year-end reporting arrangements, including forms P11D and P11D(b).
The change recognises the additional difficulties employers can face when calculating benefits for employees who work across different countries or move during the tax year. HMRC is expected to publish more detailed guidance on the changes later this year.
Employers with globally mobile employees should review their arrangements ahead of the changes and consider whether excluding these employees from mandatory payrolling would simplify their reporting. If you need help understanding the new rules or reviewing your payrolling arrangements, we can help.
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