Employers offering sal/sac cars urged to act now ahead of P11D change

Employers are being urged to start preparing now for a major overhaul in how company cars and expenses are reported.

HMRC has announced changes to the reporting and paying of tax and Class 1A national insurance contributions (NICs) on benefits in kind (BIK).

The removal of the need to report benefits on P11D forms, set to take effect from April 2026, will impact both employers and employees.

Cheryl Clements, regional development manager at Tusker, explained: “With this change, payrolling benefits will be mandatory from April 2026.  

“Employers will need to comply with how they do the deductions and report to HMRC. Those who run a salary sacrifice car scheme, along with other benefits which are on salary sacrifice, will find this especially important.”

Historically there have been complications in understanding whether employers can use a manual P46/P11D process to update HMRC about the benefit, or whether to use payrolling the benefit (otherwise known as Tax at Source). 

“The new process of payrolling benefits will simplify this for employers,” said Clements. “It will remove the frustrations which some have felt when there have been inconsistent tax deductions and delayed payments.”