Employment - important changes to prepare for

The new Employment Rights Act 2025 brings with it significant changes to the way businesses employ staff. From day-one on paternity and parental leave to guaranteed hours contracts, requests for home working and unfair dismissal claims, employers need to make sure they are prepared for changes coming into force from April 2026.

Reporting Benefits in Kind will also be changing from next April. Currently, employers report BIKs at the end of the tax year using P11D forms, paying Class 1A National Insurance Contributions (NICs) afterwards.

From 6 April 2027, HMRC will require all taxable BIKs to be processed through payroll in real time. Employers will need to include the cash equivalent of each benefit on employees’ monthly payslips, calculate tax and NICs, and report the details via the Full Payment Submission (FPS).

It is essential that employers begin to prepare by identifying all taxable benefits, ensuring accurate tracking and closing any gaps in data capture. Payroll systems must be able to record the cash value of benefits at the point they are provided, integrate with monthly payroll runs and FPS reporting and display taxable benefits clearly on employee payslips.

If you need more support or advice relating to how these changes might affect your business, Monahans has its own Payroll and HR team on board who can act as your outsourced staffing function.

Find out more here: https://monahans.co.uk/services/human-resources