HMRC has confirmed mandatory real-time reporting of income tax and Class 1A National Insurance contributions (NICs) for certain benefits in kind (BiKs) and taxable expenses will now be phased in from 6 April 2027, rather than rolled out in a single start date as originally planned.

Essentially phase one will only cover motoring expenses and medical benefits. HMRC has removed 94 categories from the initial rollout, signalling a major watering down of the original blanket plan affecting nearly all benefits in kind.

With payrolling, the taxable value of BiKs and expenses have to be reported via the full payment submission (FPS).