Fleet operators are being urged to prepare for major changes to the way company cars, vans and fuel benefits are reported, as a new House of Lords inquiry examines whether businesses will be ready for the new rules in practice.
From 6 April 2027, employers will be required to report some Benefits in Kind through payroll software using Real Time Information, rather than relying on the traditional year-end reporting process.
For fleets, the changes are particularly significant.
The first phase of mandatory reporting includes company cars, car fuel, vans and van fuel, alongside employer-provided medical benefits. (Find out more in HMRC’s Finance Bill 2026-27 draft legislation here.)
Last week, the House of Lords Finance Bill Sub-Committee launched an inquiry into the changes. It asks employers and other interested parties how straightforward the new system will be, whether businesses are sufficiently prepared and what additional administrative burden it could create.
It is also asking whether the April 2027 implementation date is achievable – click here to find out more.
Benefits In Kind Reporting: What Is Changing For Fleets?
At the moment, most Benefits in Kind can be reported after the end of the tax year. (That being said, employers can already choose to payroll some benefits voluntarily.)
The new system will make real-time reporting mandatory for the first group of benefits from April 2027. Most remaining Benefits in Kind will follow from April 2028.
For businesses operating company cars and vans, the change will make the accuracy and speed of information increasingly important.
Changes to the vehicle an employee drives, the benefits they receive or their employment circumstances will need to feed efficiently into the systems responsible for payroll and reporting.
It could mean closer coordination between fleet, payroll, HR and finance teams, particularly for larger employers managing significant numbers of drivers and vehicles.
The Government says the changes are intended to improve the accuracy and timeliness of Benefits in Kind reporting. Meanwhile, the House of Lords inquiry reflects some of the practical questions businesses will need to answer before implementation.
What Does The Change to Benefits In Kind Reporting Mean For Fleet Managers?
The obvious priority is making sure your organisation understands exactly what information will be required and who is responsible for supplying it.
But there is a wider fleet management lesson here too.
As more business processes depend on accurate, current information, fragmented spreadsheets and outdated driver records become increasingly difficult to manage.
It’s just as important for driver compliance as it is for tax reporting.
Fleet managers need to know:
- Who is currently driving for work
- Whether they hold the appropriate licence
- Whether the vehicle they use is properly insured
- Whether any outstanding compliance issues require attention
At Driving Monitor, Compliance Monitor gives fleets a central view of driver compliance, with real-time issue flagging covering areas including driving licences, business insurance, tax and MOT status.
It can also highlight drivers who require attention and maintain a digital record of compliance information, reducing the administrative work involved in keeping records up to date.
The new Benefits in Kind rules may primarily be a tax change, but they reinforce a much wider point for fleet operators.
When information about drivers and vehicles changes, businesses increasingly need to know about it quickly. The organisations with accurate records and clear processes in place will be much better positioned for the move towards real-time reporting.
