BVRLA notes payrolling of vehicle benefits confirmed from 2027

THE BVRLA is advising members to make customers aware of updated HMRC guidance and draft legislation confirming how the mandatory payrolling of BiKs will be introduced from April 2027.

Mandatory payrolling will apply to company cars, car fuel, vans, van fuel and employer-provided medical benefits. The second phase, commencing from 6 April 2028, will extend mandatory payrolling to most other Benefits in Kind. Loans and accommodation benefits will remain outside the mandatory regime and continue on a voluntary basis.

In a story on its website, the BVRLA says that the changes are particularly relevant for members who provide customers with company cars, vans or salary sacrifice vehicles.

It advises that employers that are not already reporting these benefits through payroll will need to ensure appropriate systems and processes are in place ahead of April 2027 and advise clients to seek support from payroll or tax advisers where necessary.

The changes follow the Government’s announcement at Autumn Budget 2024 that most taxable benefits and expenses would move to real-time reporting through payroll. HMRC has now confirmed that implementation will be phased, rather than introduced in a single step.

While many larger organisations already payroll vehicle benefits, the new requirements may represent a more significant change for smaller employers.

HMRC has indicated that further technical guidance will be published by July 2026, with additional stakeholder engagement taking place ahead of final guidance being issued later this year (likely to align with Autumn Budget 2026).

Specific information for cars and vans

The updated HMRC guidance is here.

The BVRLA highlights two sections of this guidance of interest to members – Benefit type F – cars and Benefit type G – vans, which details the specific information that will be needed for the payrolling of a company car, salary sacrifice and van BiK from April 2027:

These can be found in Annex 3 – additional benefits in kind fields likely to be required on Full Payment Submission returns

Any comments or concerns for the BVRLA can be sent to Zohra@bvrla.co.uk.

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