21/08/2026
Phased roll-out for mandatory payrolling benefits in kind (BIKS) — actions for you to take now
Employers should be getting ready for reporting benefits in kind (BIKS) in real time
We are encouraging you to get started now if you have not already done so.
From 6 April 2027 to 5 April 2028 mandatory payrolling will be introduced in phases.
Phase 1 will apply only to:
• company cars
• car fuel
• vans
• van fuel
• medical benefits
Mandatory payrolling for most other benefits will be introduced from April 2028. Phasing in this way will support employers and payroll providers to prepare and adapt.
Employers will not need to register in order to payroll mandatory BiKs (company cars, car fuel, vans, van fuel and private medical benefits) from April 2027.
Communicating to employees
It is important that you make employees aware of these changes.
You should explain how:
• employees who currently pay tax in arrears on BiKs will not do so from April 2027 onwards — many employees may not realise this is how they are paying tax on BiKs, and that next year they will pay tax on their BiKs for cars, vans, fuel for both and medical benefits in the year they receive them
• employees may currently have a deduction in their tax code so they pay tax on an estimated benefit — this will no longer be the case from April 2027
• tax on phase 1 BiKs must be paid in real time in the year they are received
You should act now, well ahead of the changes and will need to:
• explain how your employees will be paying tax in real time on the cars, vans, fuel for both and medical BiKs they receive for the 2027 to 2028 tax year, while they may also be catching up with payments for any BiKs from the previous tax year once mandatory payrolling applies
• encourage your emplyees to open their own personal tax account through Gov.uk – AKC have guidance on this
• be prepared for instances where your employee is paying tax in the current year as well as underpayments for previous years which may be related to BiKs
As your payroll provider AKC can guide you through these changes - our payroll software is fully compliant with the changes.
If you have any questions please contact either Lorraine or Carol.
[email protected]
[email protected]