Payrolling benefits from April 2027: your globally mobile employees are the exception

If you've heard that the P11D is being scrapped and everything moves onto payroll, that's only half the story, and the half that's missing matters most if you employ people across borders. Reporting benefits in kind through payroll in real time does become mandatory, but it arrives in phases from April 2027, it covers certain benefits first, and it comes with a deliberate carve-out: globally mobile employees are exempt.

For most of your workforce this is a process change to plan for. For your internationally mobile people, the headline is the exception, not the rule, and the risk is doing the opposite of what's needed.

What's changing, and when

Based on HMRC's draft and interim guidance (still being finalised, so worth confirming as it lands), mandatory payrolling is being phased in:

• From 6 April 2027 (phase 1): company cars, car fuel, vans, van fuel and private medical benefits must be reported and taxed through payroll in real time. The employer's Class 1A National Insurance on those benefits is reported and paid in real time too, rather than in one annual sum on the P11D(b).
• From 6 April 2028 (phase 2): mandatory payrolling extends to most of the remaining benefits in kind.
• Employer loans and living accommodation stay voluntary for now, in both phases, you can payroll them if you choose, or keep reporting them on the P11D.

Voluntary payrolling of benefits has been available since 2016. What's new is that it becomes compulsory, but in stages, and starting with a defined shortlist.

"The P11D is dead" is wrong in two ways that matter: it's phased, and it doesn't yet apply to everyone.

The carve-out: globally mobile employees are exempt

This is the part cross-border employers need to hear clearly. HMRC has confirmed that globally mobile employees (GMEs) are exempt from mandatory payrolling of benefits in kind, precisely because calculating and reporting their benefits in real time is so difficult, with foreign elements, part-year apportionment, tax equalisation and data that often only arrives after year-end.

For those employees you can:

• keep reporting benefits on forms P11D and P11D(b) at year-end, or
• choose to payroll them voluntarily, if that suits your setup.

To exclude eligible globally mobile employees, you'll submit a new online "G-Form", which HMRC will make available in November 2026. Exactly who qualifies, the precise definition of a globally mobile employee for this purpose, is still being finalised, so this is an area to watch rather than assume.

What this means if you employ people across borders

The danger here isn't a rush to comply. It's the reverse: assuming "the P11D is finished, so payroll everything" and sweeping mobile employees into a real-time process HMRC has deliberately exempted, or missing the step that keeps them out. Four things to get right:

1. Identify your globally mobile employees. Work out which of your people are likely to qualify, assignees, cross-border workers, inbound and outbound. Because the definition is still being confirmed, keep this list under review as HMRC publishes detail.
2. Keep your P11D process alive for them. For this population, year-end reporting isn't going away, don't dismantle the machinery that still applies to them.
3. Diarise November 2026 for the G-Form. Build the process to file it and to record which employees you've excluded and why.
4. Still prepare the mainstream change. Everyone else's cars, fuel and medical cover need to be payroll-ready for April 2027. Don't let the carve-out distract from the part that is mandatory.

The takeaway

For most of your workforce, plan for real-time payrolling from April 2027, starting with the phase 1 benefits. For your globally mobile people, the job is the opposite: keep them out of it deliberately, keep the P11D running, and be ready to tell HMRC via the new form from November 2026. Getting that split right, rather than assuming a blanket "payroll everything", is where employers with international staff will save themselves a messy, monthly problem.

This is a fast-moving area built on HMRC's draft and interim guidance, and the phase detail and the GME definition are still being confirmed. If you employ people across borders and want to be sure you're on the right side of the split well before April 2027, that's exactly what the Overseas Expansion Diagnostic is for. Book a call and we'll map it with you.