Voluntarily payrolling employees' benefits and expenses

You must register to voluntarily payroll most benefits in kind before the start of the following tax year.

You cannot change the way you report benefits and expenses for the current tax year.

HMRC will adjust the tax codes for all employees getting benefits through voluntary payrolling.

If you registered to payroll a benefit but are not payrolling it, use the online service to exclude your employees from the payrolled benefit.

You must send your employees a written notification (by payslip, email or letter) by 1 June after the end of each tax year to explain that you’re payrolling benefits.

The notification must tell your employees:

For the first year of payrolling you should also tell your employees that:

If you have a new employee with payrolled benefits, you must tell them how the benefit will be taxed.

Class 1A National Insurance contributions

You’ll still need to work out the Class 1A National Insurance contributions on the cash equivalent (or relevant amount for an optional remuneration arrangement) and fill in form P11D(b). The Class 1A National Insurance contributions liability applies if you’re payrolling the benefits or reporting to HMRC on form P11D.