Payroll is becoming increasingly complex, with several legislative changes on the horizon that could impact employers and employees alike.
Mandatory Payrolling of Benefits in Kind
From 6th April 2027, certain benefits including company cars, fuel benefits and medical benefits will be taxed through payroll in real time rather than through tax code adjustments.
Why employers need a plan
Without proper communication, employees may wrongly assume they are being taxed twice when transitional arrangements take effect, as they could be paying tax on benefits they are receiving in 2027-28, while at the same time catching up with payments from the previous tax year.
Staff may not understand that they currently pay tax in arrears on Benefits In Kind and that next year they will pay tax in real time in the year they are received.
To avoid confusion business owners should:
- Review payroll software
- Check existing Benefits In Kind reporting processes
- Communicate upcoming changes to employees
- Seek payroll advice where required
Mileage allowance changes
Approved mileage rates have increased for the 2026/27 tax year, creating opportunities for businesses to review reimbursement policies and potentially correct previous payroll calculations.
How Bryden Johnson can help
Bryden Johnson manages payroll for businesses of all sizes, helping clients stay compliant whilst ensuring payroll runs smoothly and efficiently.
Contact Us to see how we can help your owner managed business with proactive payroll planning, which can save significant time, reduce errors and improve employee communication.