UK confirms benefits-payrolling exception for globally mobile employees

An optional exception with a separate form

Employers will be able to use a new G-Form, expected to be available from November 2026, to identify globally mobile employees whom they wish to except. Those employees will remain in the existing year-end P11D and P11D(b) process. HMRC says the exception is optional: an employer may instead payroll the benefits in real time where its systems can do so. The bulletin does not describe global mobility alone as sufficient; the stated test is genuine difficulty in calculating and reporting benefits in real time.^[1][2]

Phase one still starts in April 2027

Mandatory real-time payrolling is due to begin on 6 April 2027 for company cars and car fuel, vans and van fuel, and private medical benefits. Employers that voluntarily payroll other benefits from that date will also have to report them and pay Class 1A National Insurance contributions through payroll. Loans and accommodation remain voluntary before their planned phase-two inclusion from April 2028. The October bulletin is operational guidance for the future regime; HMRC's published draft instruments remain illustrative rather than final legislation.^[1][3][4]

Overseas-workday and section 690 rules are unchanged

HMRC's supporting guidance says the existing section 690 direction process for internationally mobile employees will continue. A direction can limit PAYE withholding where only part of an employee's general earnings is taxable in the United Kingdom, but it does not alter the Class 1A liability on benefits. Overseas Workday Relief likewise has no National Insurance equivalent. Employers must therefore separate income-tax apportionment from the benefits and National Insurance analysis, while retaining the appropriate employee category-letter treatment for reporting.^[5]

What multinational groups should prepare

Groups should identify mobile employees whose benefits cannot be calculated reliably inside the normal payroll cycle, decide whether to use the G-Form exception and preserve the year-end reporting route for those individuals. Payroll, mobility and reward teams will also need consistent benefit valuations and data hand-offs for employees who stay in real-time reporting. Registrations for voluntary payrolling from April 2027 are expected to open in November 2026, with withdrawals required by 5 April 2027. The exception reduces an immediate systems problem for qualifying cases, but it does not remove benefit valuation, P11D or Class 1A obligations.^[1][2][3][5]