If you have people moving between the UK and Dubai, HMRC has quietly handed you a way out of the messiest part of the 2027 payroll overhaul. The department updated its draft guidance on mandatory payrolling in September, and the update says employers can keep globally mobile employees off real-time benefit reporting altogether.
TL;DR: From 6 April 2027 company cars, vans, fuel and medical benefits must be reported through payroll in real time. HMRC will let employers voluntarily exclude globally mobile employees from that requirement, using a new service opening in November 2026. Excluded employees stay on forms P11D and P11D(b).
What Did HMRC Just Change?
Employers get an opt-out for cross-border staff. HMRC's guidance now states that "employers will have the option to voluntarily exclude globally mobile employees from mandatory payrolling from 6 April 2027 through a new service that will be available from November 2026" (GOV.UK, 2026).
Nothing else about the April 2027 start date moved. The change is narrow and it only affects one population of employees, but for the firms it touches it removes a real problem. HMRC's own reasoning is that calculating a benefit value is harder when someone works across more than one country, or relocates part-way through a tax year.
For everyone outside that population, the timetable in our April 2027 payrolling guide still applies unchanged.
Who Counts as a Globally Mobile Employee?
Someone whose duties span more than one country. In practice that covers a UK-based employee working overseas for part of the year, an overseas-based employee performing UK duties, and anyone on an inbound or outbound secondment that straddles 5 April.
HMRC has not published a hard definition in the draft guidance, which matters if your case sits near the edge. The department's own preparation checklist tells employers to "consider whether your payroll processes will cope with managing employees on secondment from overseas or handling benefits that other group companies provide" (GOV.UK, 2026), which is a fair signal of the intended scope.
What we see most often is a group that assumes the UK payroll team already knows which employees are mobile. They usually do not. The list sits with HR or with the overseas entity, and nobody has reconciled it against the benefits register.
What Stays Mandatory From April 2027
Phase 1 is narrower than most employers expect, but it captures almost everything. From 6 April 2027 company cars, car fuel, vans, van fuel and employer-provided medical benefits must be reported through the Full Payment Submission, with Class 1A National Insurance paid in real time (GOV.UK, 2026).
That short list accounts for roughly 92% of all benefits provided in the UK, and HMRC has cut the reporting fields from the 126 originally proposed to 32 (ATT, 2026). Most remaining benefits follow from 6 April 2028. Employment-related loans and living accommodation stay on year-end reporting for now because HMRC accepts they are awkward to payroll.
Around 280,000 employers currently report benefits through a year-end process, and the government expects net annual savings of £18 million once the change is bedded in (GOV.UK, 2026).
Why Would You Opt a Cross-Border Employee Out?
Because real-time reporting forces you to fix a value you do not yet know. Payrolling works by dividing the annual cash equivalent of a benefit across the pay periods and taxing it as it accrues. For a UK employee with a company car and private medical cover, that number is stable from 6 April.
For someone splitting the year between Manchester and Dubai, it is not. The taxable proportion of a benefit depends on where the duties were performed and on residence outcomes that are often unresolved until well after the year ends. Payroll either guesses and corrects every month, or it holds the position and reports once on a P11D.
One question clients always ask is whether opting out loses them anything. It does not. The P11D route is the same year-end filing they run today, with the same 6 July deadline and 22 July Class 1A payment date.
November 2026 Is a Two-Service Month
Two separate HMRC services open in the same month, and it is easy to confuse them. The first is the globally mobile exclusion service described above. The second is the registration service for voluntarily payrolling benefits that are not mandated in Phase 1, and that one carries a hard deadline of 5 April 2027 (GOV.UK, 2026).
If you want loans or accommodation inside payroll from April 2027, you register. If you want cross-border staff outside it, you use the exclusion service. Doing one does not do the other.
There is also a one-year softening on penalties. The government will take a power to modify how Schedule 24 of the Finance Act 2007 applies, so that penalties are not charged on non-deliberate inaccuracies for a limited period of one year (GOV.UK, 2026).
What Should You Do Before 5 April 2027?
Build the list of mobile employees now, while there is time to argue about who is on it. Three jobs, in order.
First, cross-reference your benefits register against HR's assignment records and identify every employee whose duties touched more than one country in 2026-27. Second, confirm with your software provider that it can carry the 32 RTI benefit fields, because a provider who is late is your problem, not HMRC's. Third, decide per employee whether the exclusion is worth using, and diarise November 2026 to action it.
When we reviewed a client's secondment file last year, two of the five inbound employees had company cars that the UK payroll had never seen, because the cost sat in the overseas entity. That is the gap this exclusion is designed around. Our payroll and advisory team can run the reconciliation with you.
Frequently Asked Questions
Is the exclusion automatic for overseas employees?
No. It is a positive choice you make through a new HMRC service that opens in November 2026. If you take no action, mandatory payrolling applies to those employees from 6 April 2027 like everyone else.
Which benefits must be payrolled from April 2027?
Company cars, car fuel, vans, van fuel and employer-provided medical benefits, including private medical insurance. Most other taxable benefits follow from April 2028. Employment-related loans and living accommodation remain on year-end reporting until HMRC confirms a date.
Do we still file a P11D for an excluded employee?
Yes. HMRC says employers should continue using existing year-end arrangements through forms P11D and P11D(b) for any employee covered by the exclusion. The filing date stays 6 July after the tax year, with Class 1A due by 22 July electronically, or 19 July if you pay by post.
Does this change anything for short-term business visitors?
Not directly. The exclusion deals with benefit reporting, not with PAYE on earnings. If you host inbound visitors, the separate rules covered in our guide to short-term business visitor PAYE still apply on their own terms.
How does this interact with UAE residence?
The exclusion is a UK reporting choice and it says nothing about where someone is taxed. Treaty position and residence are decided separately, and a UAE tax residency certificate may still be needed to support relief on the employee's side.
If you move staff between the UK and the UAE and you are not sure which of them HMRC would treat as globally mobile, get in touch. We can reconcile your benefits register against your secondment list and tell you which employees are worth excluding before the November service opens.