As we approach the new tax year, employers should take the opportunity to review upcoming payroll changes and assess the potential impact on their business.
The National Living and Minimum wage is increasing by 4.1% and 8.5% respectively. For employees aged 21 and over the National Living Wage is increasing from £12.21 to £12.71 per hour. For employees aged 18-20 the National Minimum Wage is increasing from £10.00 to £10.85 per hour. These increases don’t just affect entry-level pay; they ripple through entire salary structures.
Although the mandatory payrolling of benefits doesn’t come into effect until April 2027, employers shouldn’t see this as a reason to wait. If you want to payroll your BIK this tax year you need to register with HMRC before 5 April 2026.
Moving to payrolling from April 2026 can reduce admin, remove year-end P11D pressure and give employees greater clarity over their tax position. For many businesses, adopting it early is less about compliance and more about simplifying payroll and future-proofing processes.
If you need support navigating these changes, our specialist payroll team is here to ensure you remain compliant and that your people are paid accurately and on time, every time.
