Payrolling Benefits

To simplify and modernise the tax system, HMRC have mandated payrolling benefits in kind by no later than April 2026.

Bradford District Care NHS Foundation Trust (BDCFT) will make the change from April 2025.

Currently, colleagues with a lease car, usually through NHS Fleet Solutions, and, or those using the Home Electronics Scheme, are likely to have an amended tax code. This is because your employer is providing you with a Benefit in Kind (BIK) and this is the way in which HMRC collect tax due.   Each year, colleagues receive a P11D for the services they have benefited from during the previous tax year.  Benefits not currently payrolled are employer provided living accommodation, you will still receive a P11D for this benefit

From April 2025 BDCFT will begin payrolling all benefits. This will make it easier for you and make sure your tax is correct straight away without waiting for HMRC to make an adjustment to your code. Instead, everything will be adjusted on your payslip from the moment your BIK begins.

Payrolling benefits has the following advantages:

• Simpler tax codes that are easier to understand – they do not include adjustments for BIK
• HMRC receive the payrolled benefit information each month meaning your record with them is up to date.
• When submitting a self-assessment tax form (where appropriate) employees need only use the information from the month 12 payslip or P60.

Please note that colleagues will not pay any more tax than they would have via P11D. Payrolling benefits is purely a different way of collecting tax and sending the information to HMRC in a timelier manner.  HMRC will issue you with a normal tax code which will no longer include a deduction for benefits in kind from April 2025, but please be aware if  there is a tax adjustment from HMRC relating to a previous year this could still be included in your code

We will be sending out a series of communications over the next few months to make sure you have all the information you need to understand the change, we can be contacted at:  payroll.service@bdct.nhs.uk with any queries

You don’t need to do anything, we’ll keep you updated, if you are affected by this change, we will write to you individually before April 2025, and again before 2nd June 2026 with the following details:

•  Details of the benefits that have been payrolled – for example, Lease cars,  this can include what the benefits are, their value, the cash equivalent and which   ones have been subject to PAYE tax
•  Details of any benefits that have not been payrolled (for example employer provided living accommodation)

If you are new to a scheme we will issue the details of benefits to be payrolled within 3 months of your start date.

Frequently Asked Questions

Q Will I be taxed twice in the first year

A No, HMRC will issue you with a normal tax code which will no longer include a deduction for benefits in kind from April 2025, however sometimes adjustments for previous tax tears are required by HMRC, these could still be in your code

Q What will happen in the first year

A Your tax code will change to take out the adjustment for your benefits in kind
An adjusted amount will be processed through payroll each pay period, and tax will be applied to that amount
At the end of the tax year, you will be told how much taxable benefit you have had in the year and what it was for

Q Will I receive a P11D for tax year 2024/2025

A Yes, this is because payrolling benefits is for the tax year 2025/26

Q Do I have to submit payrolling benefits on a tax self-assessment 

A You would submit the same details as previously required from a P11D

Q What will I see on my payslip

A you will see the following message at the bottom of your payslip – (Please note that the amount will vary from this example and will depend on the vehicle you have. In this example, the taxable value is the amount of additional taxable pay and not the actual amount of tax.

• The taxable value of (GB BIK Car and Car Fuel) is 74.83. Tax will be charged on this amount at your current tax rate.
• If the person pays tax at the basic 20%, the additional tax will be £14.97.
• An employee on higher earnings and taxed at 40% the amount of tax would be £29.93.