What is PBiK?
As a UK employer, one of your obligations is to submit P11D forms for your employees each year. These tell HMRC if the employee gets taxable benefits in kind (e.g. company car, private medical insurance, interest-free loan).
Under PBiK, these benefits are ‘payrolled’. Instead of using P11D forms, you would add the cash equivalent of the employee’s benefit to their taxable pay and then tax them through your payroll, with the appropriate tax being deducted via PAYE. HMRC ensure that the value of the benefit is not included in the employee’s tax codes.
Why is now the right time to move to PBiK?
From 6 April 2027 (i.e. the 2027/28 tax year), PBiK will be mandatory for UK employers. However, companies can move voluntarily to PBiK for the 2026/27 tax year, with an enrolment deadline of 5 April 2026.
Unfortunately, PBiK cannot be applied to annual director payrolls just yet.
What are the advantages of PBiK?
- Reduced administration: PBiK removes the need to complete P11D forms at the end of the tax year.
- Employees taxed in real time: employees pay the correct amount of tax throughout the year, avoiding large, unexpected tax bills or tax code adjustments later.
- Transparency: employees have greater visibility of their benefits and the associated tax on their payslips.
Frequently Asked Questions: Payrolling Benefits in Kind (PBiK)
What is Payrolling Benefits in Kind (PBiK)?
PBiK is an HMRC service that allows employers to tax employee benefits directly through payroll instead of completing annual P11D forms. The cash equivalent of the benefit is added to the employee’s taxable pay, and tax is collected in real time through PAYE.
Which benefits can be payrolled?
Common taxable benefits such as company cars, private medical insurance, and interestfree loans can be processed through PBiK. (Standard HMRC exclusions still apply.)
Is PBiK mandatory?
PBiK becomes mandatory from 6 April 2027 for all UK employers. However, employers can choose to adopt it earlier for the 2026/27 tax year, with voluntary enrolment open until 5 April 2026.
Moving early helps employers adjust processes, avoid lastminute deadlines and reduce admin immediately.
What are the benefits of switching to PBiK?
- No more endofyear P11D forms
- Employees are taxed accurately throughout the year, reducing unexpected bills.
- Employees can clearly see benefits and related tax on their payslips.
How we can help
The payroll team at BKL are ready to help clients stay ahead: guiding them through the initial setup and a smooth transition to their new processes for 2026/27. With the April deadline in mind, we would look to start this work as soon as possible.
If you’re a BKL payroll client who is interested in enrolling for the 2026/27 tax year, please get in touch with your usual contact and we can handle the registration and setup for you. The closing date for voluntary registration is 5 April 2026. We’re pleased to offer a reduced fee taking into account early registration.
If you would prefer not to move to PBiK during the voluntary phase, our payroll team can still help you to enrol by the mandatory deadline (5 April 2027).
For a chat about how we can help you, or to find out more about PBiK, please get in touch with me or your usual payroll contact at BKL.
