Income Tax PAYE Amendment Regulations 2026

UK New Legislation

Published April 6th, 2026

Detected March 2nd, 2026

Summary

The UK's HM Revenue and Customs has issued the Income Tax (Pay As You Earn) (Amendment) Regulations 2026, effective April 6, 2026. These regulations amend the PAYE Regulations 2003, notably removing the voluntary registration for pay-rolling benefits in kind for the 2027-28 tax year onwards and altering information submission requirements for businesses that cease trading.

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What changed

The Income Tax (Pay As You Earn) (Amendment) Regulations 2026, effective April 6, 2026, introduce significant changes to the UK's PAYE system. Key amendments include the removal of the option for employers to voluntarily register for pay-rolling benefits in kind from the 2027-28 tax year, as this will become mandatory. Additionally, employers ceasing to trade will have altered requirements regarding the submission of annual P11D returns, allowing for paper submissions instead of mandatory electronic ones.

These changes require employers to prepare for the mandatory pay-rolling of benefits in kind starting in the 2027-28 tax year. Compliance officers should review internal payroll processes and systems to ensure readiness for this transition. The altered reporting requirements for businesses ceasing operations should also be noted to ensure correct procedures are followed. While the effective date is April 6, 2026, the impact on pay-rolling benefits in kind is phased, with the mandatory aspect commencing in the 2027-28 tax year.

What to do next

Prepare for mandatory pay-rolling of benefits in kind from the 2027-28 tax year.
Review and update internal payroll processes and systems to accommodate mandatory pay-rolling.
Ensure understanding of revised information submission requirements for employers ceasing to trade.

Source document (simplified)

Status:

This is the original version (as it was originally made). This item of legislation is currently only available in its original format.

Statutory Instruments

2026 No. 189

INCOME TAX

The Income Tax (Pay As You Earn) (Amendment) Regulations 2026

Made

27th February 2026

Laid before the House of Commons

2nd March 2026

Coming into force

6th April 2026

The Commissioners for His Majesty’s Revenue and Customs make these Regulations in exercise of the powers conferred by section 113(1) of the Taxes Management Act 1970(1), section 133(1) and (2) of the Finance Act 1999(2), section 136(1) and (2) of the Finance Act 2002(3) and section 684(1) and (2) of the Income Tax (Earnings and Pensions) Act 2003(4) and now exercisable by them(5).

Citation and commencement

These Regulations may be cited as the Income Tax (Pay As You Earn) (Amendment) Regulations 2026 and come into force on 6th April 2026.

Amendment of the Income Tax (Pay As You Earn) Regulations 2003

—(1) The Income Tax (Pay As You Earn) Regulations 2003(6) are amended as follows.

(2) In regulation 61C (authorised employer), after paragraph (9) insert—

“ (9A) An application cannot be made under this regulation for the tax year 2027-28 or subsequent tax years. ”.

(3) In regulation 207 (specified information), after paragraph (1) insert—

“ (1A) But the information described in paragraph (1)(f) is not “ specified information ” in relation to an employer who has ceased to carry on business.

(1B) In paragraph (1A), “ business ” includes any trade, concern or undertaking. ”.

Penny Ciniewicz

Jonathan Athow

Two of the Commissioners for His Majesty’s Revenue and Customs

27th February 2026

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Income Tax (Pay As You Earn) Regulations 2003 (the “ PAYE Regulations ”).

Regulation 2(2) removes the option for employers to voluntarily register for pay-rolling benefits in kind for the tax year 2027-28 and subsequent tax years, as pay-rolling will become mandatory from that tax year.

Regulation 2(3) amends regulation 207 of the PAYE Regulations by removing the requirement for employers, whose businesses cease trading, to submit the annual return of the P11D via an official computer system using an approved method of electronic communication and enabling them to choose whether to submit the return electronically or in paper form in accordance with regulation 211.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.

(1) 1970 c. 9.

(2) 1999 c. 16.

(3) 2002 c. 23.

(4) 2003 c. 1. Section 684 was relevantly amended by paragraph 102(2) of Schedule 4 to the Commissioners for Revenue and Customs Act 2005 (c. 11) (“ CRCA ”), paragraphs 2 and 3(2) of Schedule 58 to the Finance Act 2009 (c. 10), section 17(1) and (2) of the Finance Act 2015 (c. 11) and section 15 of the Finance Act 2016 (c. 24).

(5) The functions of the Commissioners of Inland Revenue were transferred to the Commissioners for His Majesty’s Revenue and Customs by section 5 of the Commissioners for Revenue and Customs Act 2005 (“ CRCA ”). Section 50(1) of CRCA provides that, in so far as it is appropriate in consequence of section 5, a reference, however expressed, to the Commissioners of Inland Revenue is to be read as a reference to the Commissioners for His Majesty’s Revenue and Customs.

(6) S.I. 2003/2682; relevant amending instruments are S.I. 2015/1927, S.1. 2007/2969, S.I. 2023/307.