April 2027 payroll changes: what the changes to Benefits in Kind mean and how to prepare

Changes are coming to payroll from 6 April 2027, with certain Benefits in Kind moving to real-time reporting through payroll software and HMRC. 

For businesses, now is a good time to understand what’s changing and make sure your payroll processes are ready. 

In this blog, we’ll break down what the changes mean, what to look out for and how you can prepare. 

What are Benefits in Kind? 

Benefits in Kind are benefits or perks that employees receive from their employer on top of their usual salary. They form part of an employee’s overall reward package and can take many forms, including company cars, private medical insurance and other workplace benefits. 

What’s changing from April 2027? 

From 6 April 2027, certain Benefits in Kind will need to be reported through payroll in real time, changing the way businesses handle their reporting. Rather than reporting these benefits through the current year-end P11D process, they will become part of regular payroll reporting. 

The change means these benefits will become a more regular part of the payroll process, so businesses will need to make sure they have the right information and processes in place to report them correctly. 

 The first phase includes: 

• Company cars 

• Company car fuel 

• Company vans 

• Company van fuel 

• Employer-provided medical benefits 

Most other Benefits in Kind are expected to follow from April 2028, while the timing for employer-provided loans and accommodation is yet to be confirmed. 

What do the changes mean for businesses? 

For businesses providing affected Benefits in Kind, the changes will make accurate, up-to-date information even more important. 

Benefits information will need to reach whoever manages payroll in time for it to be reported correctly. If HR, benefits and payroll information is held in different places, that could mean more manual updates, additional checks and more opportunities for human error. 

It’s also important to think about employees. HMRC recommends communicating early so those affected understand how the changes could impact their tax codes and take-home pay. 

How can you prepare for April 2027? 

The good news is that preparing doesn’t necessarily mean completely changing the way you manage payroll. It’s about understanding where you are now and identifying anything that may need attention before April 2027. 

Ahead of April 2027, consider: 

Your Benefits in Kind
Make sure you know which benefits you provide and which employees could be affected. 

How information reaches payroll
Look at how benefits information is currently shared with whoever manages payroll and whether there are unnecessary manual steps. 

Your payroll software
Consider whether your payroll software is ready to support the new real-time Benefits in Kind reporting requirements. 

Your employees
Plan how you’ll communicate the changes and what they could mean for those affected. 

A little preparation now can help make the move to real-time reporting feel much more manageable. 

How SafeHR Payroll can help 

With accurate information becoming even more important to the payroll process, having HR and payroll working together can help keep records consistent and reduce unnecessary manual work.  

SafeHR Payroll works alongside the SafeHR platform to bring HR and payroll closer together, with connected employee records, automated payroll calculations, HMRC RTI submissions, pension auto-enrolment support, statutory pay calculations and secure employee access to payslips. 

By keeping HR and payroll information connected, businesses can reduce duplicate work, improve accuracy and give those responsible for payroll greater confidence every pay cycle. 

SafeHR Payroll is preparing for the April 2027 changes, helping businesses get ready for the move towards real-time Benefits in Kind reporting.