Payroll & employment
Payrolling benefits taxes them in real time instead of through a P11D. Registration timing, how the cash equivalent is spread and what still needs reporting.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
Regulated by
Regulated & AML supervisor
AAT fellow member
Xero Gold PartnerCertified advisor
QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityRegister with HMRC before the start of the tax year, then add the cash equivalent of each benefit to taxable pay in equal instalments across the year. Income tax is collected in real time, and Class 1A NIC is still settled after the year end.
How it works in payroll
Why it is worth doing
Register with HMRC before the start of the tax year, then add the cash equivalent of each benefit to taxable pay in equal instalments across the year. Income tax is collected in real time, and Class 1A NIC is still settled after the year end.
Calculate the annual cash equivalent of each benefit under the normal rules, divide it by the number of pay periods, and add it to taxable pay each period. It is taxed, not paid, so net pay falls by the tax rather than the full benefit value.
Employees must be told before 1 June after the tax year what was payrolled, which the payslip usually covers. Employees' tax codes are adjusted by HMRC to remove old benefit adjustments, which is where confusion arises in the first year.
It removes annual P11Ds for the payrolled benefits, avoids employees carrying tax code adjustments a year behind, and stops surprise underpayments. With payrolling moving towards being mandatory, early adoption spreads the work.
Registration must happen before 6 April for the year concerned. Miss it and you are on P11Ds for another full year.
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.
Local help
We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.
Frequently asked
Beneficial loans and living accommodation have historically been excluded, with changes scheduled. Check the current position before the year starts.
Yes, for the Class 1A NIC on all benefits, payrolled or not.
You register by benefit type, and it then applies to the employees receiving that benefit.
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
Talk to an accountant
Share your next deadline, accounting problem or growth question. We will reply with a clear next step and quote any technical work before it begins.
Chat with ACCOTAX on WhatsAppPick a time that suits you and a qualified accountant will call you about your company, deadlines and fees.
Appointments run Monday to Friday, 9:00am to 5:30pm. Your confirmation is emailed straight away.
Four London offices
Work with us entirely online, or sit down with your accountant at whichever office suits you. Open Monday to Friday, 9:00am to 5:30pm. Office visits are by appointment only, so please book before coming in.
Free, no obligation
Pick a time that suits you and a qualified accountant will call you about your company, deadlines and fees.
Appointments run monday to friday, 9:00am to 5:30pm. Your confirmation is emailed straight away.
