P11D is ending for company cars. Your vehicle data has to be right every pay run.

8 min read · 11 September 2026. Mandatory payrolling of benefits in kind starts on 6 April 2027, and company cars are in phase one. The annual P11D tidy-up stops being the mechanism that catches errors, because the tax is deducted in-year instead.

From 6 April 2027, most employers will report company cars, car fuel, vans, van fuel and employer-provided medical benefits through payroll and Real Time Information. Income Tax and Class 1A National Insurance on those benefits are reported in-year on the Full Payment Submission, rather than after the tax year ends.

That is a change in timing as much as in paperwork. A company-car benefit currently reported once, months after the year it relates to, becomes a figure that has to be right in every pay run it appears in.

What mandatory payrolling actually is

Mandatory payrolling means reporting taxable benefits through payroll and RTI, with the associated tax handled during the tax year. It is not a new tax and it does not change how a company-car benefit is calculated. It changes when the figure has to exist and how often it is submitted.

Employers do not need to register in order to payroll the mandatory benefits. Registration remains relevant for voluntarily payrolling benefits that sit outside the mandatory set, and HMRC has said that service goes live in November 2026.

The two phases

The introduction is phased across two tax years, and the second phase is wider than the first.

Phase one, from 6 April 2027: company cars, car fuel, vans, van fuel and employer-provided medical benefits.
Phase two, from 6 April 2028: most remaining benefits in kind. Employment-related loans and accommodation are excluded and stay voluntary.

Fleets are therefore in the first wave rather than the second. Company cars are one of the five benefit types that move a full year before most others.

Does P11D disappear completely?

No. Most employers will stop reporting the phase-one benefits after the end of the tax year, because those benefits move into payroll. The end-of-year route remains for benefits outside the mandatory regime, which is why loans and accommodation continue to be reported through existing processes.

The practical reading is narrower than "P11D is abolished". For a fleet, the company car specifically leaves the annual form and enters the pay run.

What payroll needs to know about each car

Payroll software can only report what it is given. For a company-car benefit that means a specific set of facts about the vehicle and its assignment.

The employee the car is assigned to. The date it became available, and the date it was withdrawn. The list price and qualifying accessories. Fuel type and approved CO₂ emissions. The approved zero-emission range where the car emits between 1g/km and 50g/km. Periods of unavailability. Employee capital contributions and any payments for private use. Whether private fuel was provided, and the date it was withdrawn if it was.

HMRC's own guidance on calculating the taxable value points at the same inputs: fuel type and CO₂ emissions, the time the car was unavailable during the tax year, and the zero-emission mileage figure for cars in the 1g/km to 50g/km band.

The problem is not the software

Those facts rarely live in one place. The leasing company holds the contract and the delivery date. HR holds the employee record. The fleet spreadsheet holds the allocation. Payroll holds none of it until someone sends it over.

Under an annual process, a gap between those systems has up to a year to be found and corrected before anything is filed. Under an in-year process, the same gap produces a wrong deduction in a live pay run, and the correction happens in front of the employee.

Vehicle events are the part most likely to slip. A car returned mid-month, a driver swap, a replacement vehicle during a repair, private fuel withdrawn partway through the year: each one changes the benefit, and each one has to reach payroll while the pay run is still open.

Where connected-vehicle data fits, and where it does not

Orbis reads data from manufacturer-connected vehicle systems through High Mobility's Auto API, covering 30 manufacturer brands and over 500 models, with no aftermarket telematics unit required. Depending on the manufacturer, that provides odometer readings, fuel level, state of charge and location, normalised into a single record per vehicle.

It is worth being precise about what that does for a benefit calculation, because the honest answer is that it does not produce one. List price, approved CO₂ figures, qualifying accessories, capital contributions and the assignment record itself are not vehicle signals. They live in the fleet, leasing and HR systems, and they still have to be maintained there. Orbis does not calculate a benefit in kind and does not run payroll.

What connected data does supply is the operational layer around that record: whether a vehicle is actually in use, what the odometer says, and when its pattern changes. On the Enterprise tier that data is available through an API into your own systems, and the platform exports expense claims as PDF and CSV to payroll. Those are the two routes into an existing payroll process.

It also matters for the adjacent processes that are genuinely mileage-driven. Standard company-car benefit does not depend on business mileage. Private-fuel reconciliation, HMRC Advisory Fuel Rate claims and expense approval all do, and those are calculated from actual mileage read from the vehicle rather than from a form.

That is where the expenses view classifies. Each trip and each charging session is proposed as business or personal, from location and time patterns: a work address defaults to business, home to personal, and a weekday-daytime journey is treated as more likely business than a Sunday evening one. Each one carries a confidence score, and anything the rules cannot call is left unclassified rather than guessed. The fleet manager keeps a per-journey include or exclude toggle, and those decisions train the classification for that location, so a regularly visited site stops needing a manual call. Only the included journeys reach the exported claim.

Why the source of the number matters

Self-reported mileage is late, incomplete or written from memory. Retrofitted telematics improves the record but adds hardware, installation and another supplier. Manufacturer-connected data comes from a system already built into the car.

The gap between the declared position and real operation is not theoretical. On one live UK fleet, Orbis found a Volkswagen Tiguan plug-in hybrid returning 46.9mpg against a manufacturer figure of 287.2mpg. Across 649 readings the battery sat depleted 81% of the time, so the car was rarely being charged. That came to an additional £1,176 a year in fuel, against an ESG report still carrying the official 30g/km CO₂ figure.

That example is not a company-car benefit calculation, and it is a single vehicle rather than a fleet average. It illustrates a narrower point: an annual declaration and a static vehicle record can both look correct while the vehicle does something else entirely.

A note from Alan Carreras

"I spent 40 years in UK fleet, from apprentice technician to running a 35,000-vehicle operation, and I chaired the BVRLA Leasing Broker Committee. I have watched fleets treat mileage as a once-a-year tidy-up. That habit stops working in April 2027. When tax on the car is deducted every pay run, the data behind it has to be right every pay run. Reading it from the vehicle, not the driver's memory, is how you make that safe."

What to do before April 2027

The useful work now is mapping the data path, not choosing software. For each field payroll will need, establish which team owns it, where it is recorded, and how a change reaches payroll.

Check who owns each required field. Where vehicle assignments and changes are recorded today. How quickly an addition, a withdrawal or a period of unavailability reaches payroll, measured in days rather than in principle. Whether private-fuel provision and employee contributions are recorded correctly. Which steps still depend on a driver submitting something manually. How an exception is spotted and corrected once a pay run has gone out. And whether payroll can show an audit trail for every reported change.

Connected-vehicle data is one input to that operating model, not a replacement for the benefit record. It is worth reading alongside how we treat fleet intelligence and company-car BIK in 2026, and what the platform produces from the same vehicle record.

This article is for general information only and is not tax, payroll or legal advice. Employers should obtain independent professional advice on their own facts. The rules described here are as published by HMRC at the date of this article, and guidance on mandatory payrolling is still being developed, so check the current HMRC position for the relevant tax year.

Frequently asked questions

What is mandatory payrolling of benefits in kind?

It is the reporting of taxable benefits through payroll and Real Time Information, with the associated Income Tax and Class 1A National Insurance handled during the tax year rather than through an annual end-of-year return.

When does mandatory payrolling begin?

Phase one begins on 6 April 2027 and covers company cars, car fuel, vans, van fuel and employer-provided medical benefits. Phase two follows from 6 April 2028 for most remaining benefits, excluding employment-related loans and accommodation, which stay voluntary.

Does P11D disappear completely?

No. Most employers will stop reporting the phase-one benefits, including company cars, after the end of the tax year, because those move into payroll. End-of-year reporting remains for benefits outside the mandatory regime, such as loans and accommodation.

Do employers need to register to payroll company cars from April 2027?

No. Registration is not required for the mandatory benefits. Employers who want to voluntarily payroll benefits outside the mandatory set will need to register, and HMRC has said that service goes live in November 2026.

What data does payroll need for a company car?

The employee assigned to the car, the dates it became available and was withdrawn, the list price and qualifying accessories, fuel type and approved CO₂ emissions, the approved zero-emission range for cars emitting 1g/km to 50g/km, periods of unavailability, employee capital contributions and payments for private use, and whether private fuel was provided.

Is business and private mileage used to calculate company-car benefit?

Not ordinarily. Standard company-car benefit is based on the list price, approved CO₂ emissions, fuel type, availability and relevant employee contributions. Mileage still matters for private-fuel reconciliation, Advisory Fuel Rate claims, expenses and other fleet processes.

Can Orbis separate business and personal journeys?

Yes, in the expenses view. Trips and charging sessions are classified as business or personal from location and time patterns, each with a confidence score, and anything the rules cannot call is left unclassified. The fleet manager can include or exclude any journey, and those decisions refine the classification for that location over time. Only included journeys reach the exported claim.

Does Orbis calculate benefit in kind or run payroll?

No. Orbis supplies vehicle data. The benefit calculation and the payroll submission stay in your payroll software, and inputs such as list price, approved CO₂ figures and capital contributions are maintained in your fleet or payroll systems.

Does Orbis require additional vehicle hardware?

No aftermarket device is required where the data is available through the manufacturer's connected-vehicle service. Coverage is set by the manufacturer, so a mixed fleet is usually part hardware-free rather than all or nothing.

How can Orbis data reach existing systems?

Expense claims export as PDF and CSV to payroll. API access to your own data is available on the Enterprise tier for integration into existing fleet, expenses and payroll systems.