HMRC Introduces Agents to Register Benefits in Kind (BiK)

HMRC has introduced a new service that allows agents to register employment benefits for taxation through their clients' payrolls from the 2025/26 tax year. This development aims to simplify tax obligations for employers and their representatives by streamlining the reporting process.

What Is the New Service?

The HM Revenue & Customs (HMRC) has launched a new service that enables agents to register employment benefits for taxation through their clients' payrolls starting from the Tax Year 2025/26. Additionally, agents can now register with HMRC for Benefits in Kind (BiK). This new service streamlines the tax reporting process, enabling agents to manage BiK taxation on behalf of their clients efficiently.

The deadline for an agent to register with HMRC to payroll BiK for the Tax Year 2024/25 is 22:00 (10:00 PM) on 5 April 2025. By opting to use the employer liabilities and payments service, agents can access this new functionality, making it easier to report and account for BiK.

What Are the Upcoming Changes?

Presently, employers have the option to submit a P11D form for the BiK to be payrolled. Recently, HMRC announced that starting from the 2026/27 tax year, payrolling BiK will be made mandatory. This marks a significant move towards in-year reporting, which also includes the accounting for Class 1A National Insurance Contributions (NIC). The objective of this change is to improve the efficiency and compliance of the system.

However, there are still some unresolved details that need to be sorted out before implementation. To ensure that the transition is successful and that employers' burdens are minimised, the Tax Faculty of ICAEW is working closely with HMRC. It is recommended that employers stay informed about these developments and provide feedback to relevant stakeholders to shape the future of tax administration.

Conclusion

The recent launch of HMRC's new service for agents to register Benefits in Kind (BiK) taxation through client payrolls is a significant milestone in simplifying tax reporting and compliance. Both agents and employers can now benefit from more efficient processes and reduced administrative burdens.

As we move towards mandatory payrolling of BiK, it becomes increasingly important for all stakeholders to work together to ensure seamless implementation and minimise disruptions for businesses.