HMRC opens the application process for globally mobile employee exceptions from mandatory payrolling.
Following HMRC’s earlier confirmation, as explained in our article of 26 October 2026, qualifying globally mobile employees (GMEs) can be excluded from the new mandatory payrolling regime. HMRC has now published its guidance and opened the online service which employers will need to use to start or end an exception from the payrolling of benefits. With mandatory payrolling beginning on 6 April 2027, employers with internationally mobile workforces need to decide how they wish to proceed.
The guidance confirms the exception is optional and is designed to preserve the existing year-end reporting process for employees whose benefits are difficult to payroll in real time. We summarise the key points below as well as the practical issues employers should be considering now.
A quick reminder of what is changing
From 6 April 2027, employers must report the following benefits in kind through their payroll, rather than on Forms P11D:
- Company cars and car fuel;
- Company vans and van fuel; and
- Medical insurance.
Employers can now apply to HMRC for an exception for eligible globally mobile employees. Where an exception applies, the employee’s benefits continue to be reported through the P11D and P11D(b) at the end of the tax year. For further details please see our separate articles relating to the payrolling of benefits.[link required the pillar]
Which employees are eligible?
HMRC describes globally mobile employees as those who work, or are likely to work, either:
- both in and outside the UK;
- in the UK, while receiving benefits or expenses from their employer outside the UK; or
- outside the UK, while receiving benefits or expenses from their employer in the UK.
Falling within that description is not enough on its own. An exception may only be available where both of the following conditions apply:
- they are likely to receive benefits or expenses in at least two pay periods in a tax year; and
- the employer will not have enough information to payroll those benefits or expenses when the employee receives them.
HMRC has specifically excluded employees who only have short-term business travel or remote working outside the UK, occasional overseas meetings or other temporary travel arrangements will not be eligible.
What is the impact of the exception
An exception changes only how and when the employee’s benefits are reported. It does not change the amount of Income Tax or National Insurance due, or how either is calculated. The key points are:
- The employee’s benefits must be reported on the P11D and P11D(b) at the end of the tax year.
- An exception applies to all benefits in kind provided to that employee. Employers cannot payroll some benefits and report others on a P11D.
- The operation of PAYE for globally mobile employees, including EP Appendix arrangements, is not affected. Existing PAYE obligations continue to apply.
When to apply to start an exception
Employers should apply as soon as they become aware that an employee is, or is likely to be, a globally mobile employee. Timing matters because an exception cannot be backdated. This in turn means that any benefits provided must continue to be payrolled, as with other employees, until the exception start date applies.
Ending an exception
Employers should apply to end an exception as soon as they become aware that an employee will no longer be eligible.
An exception can only end at the end of a tax year (5 April). The employee’s benefits for the tax year that includes the end date must be reported on the P11D and P11D(b). If the employer continues to provide benefits in kind after that, they must be reported through payroll from 6 April of the following tax year.
How to apply
Applications are made online through the HMRC website (Government Gateway or one account). Any number of employees can be included within the application Employers will need to provide the following:
- Business name and address;
- PAYE reference (in the format 123/AB456); and
- Employee details including full name, National Insurance number (or date of birth if they do not have one), payroll or works number if available, the exception start date, which must be on or after the date the form is submitted, and the exception end date, if known or applicable.
Where no end date is given, the exception remains in place until the employer sends another form to terminate its use.
After you submit the form
Employers will receive an email with an application reference and should treat the employees on the form as exceptions from the start date given. There is no need to payroll their benefits and expenses from that date. HMRC will only contact an applicant if it cannot process an application.
HMRC may be unable to process an application where the details do not match its records. HMRC will explain what needs to be done for any records it cannot process. Details cannot be changed once a form is submitted. If a correction is needed, for example because an employee’s start date is delayed, a new form must be sent with the revised details.
Areas to consider
The process is straightforward, but the decisions behind it are not. In our view, employers should be considering the following now.
- Identify your globally mobile population. Review your inbound, outbound and multi-country employees. This will include those on assignment, secondment or split-payroll arrangements, and those paid or recharged through overseas group companies. HR, mobility, payroll and finance teams will all need to contribute.
- Test each employee against the criteria. The two-part test is based on the likelihood of benefits or expenses arising in at least two pay periods and on whether you will have enough information to payroll them at the time. Document your reasoning for each employee so that you can support the decision if it is later questioned.
- Be cautious with borderline cases. Employees who travel occasionally, or who work remotely abroad for a short period, are unlikely to qualify. For these employees, payrolling will remain the default and systems and processes need to be ready.
- Consider the all-or-nothing rule. Because an exception covers all of an employee’s benefits in kind, you cannot payroll the car or medical cover and report other benefits on a P11D. Think about how this fits with your payroll set-up and benefits administration.
- Plan for a mixed approach. Many employers will have some employees whose benefits are payrolled and others who remain on the P11D process. Payroll software, internal procedures and employee communications will need to cater for both for as long as the exceptions apply.
- Check your data before you apply. Employer and employee details must match HMRC’s records, and the employee must have an active employment record. Checking names, National Insurance numbers, dates of birth and PAYE references in advance reduces the risk of rejected or delayed applications.
- Set an end date where you can. If you know that an assignment will finish, providing an end date when applying avoids the need to submit a separate form later. If you do not know the end date, diarise regular reviews so that an exception is not left running after an employee ceases to be eligible.
Points to note
The following are key points which employers need to consider.
- No backdating. An exception cannot be backdated and the start date must be on or after the date the form is submitted. Applying late could mean that benefits for an eligible employee have to be payrolled for a period.
- No waiting for approval. Employers do not need to wait for HMRC to confirm an application. However, you should monitor for any contact from HMRC and keep a record of the application reference.
- Errors can delay processing. Details cannot be amended once submitted, so accuracy at the outset is important. A corrected form will be needed if anything changes.
- Exceptions end on 5 April. An exception can only end at the end of a tax year, and payrolling of any continuing benefits must start from 6 April.
- Tax and National Insurance are unchanged. The exception affects how benefits are reported, not how much tax or National Insurance is due. Class 1A National Insurance on benefits reported on the P11D(b) is still payable in the usual way.
- PAYE obligations remain. Existing PAYE obligations for globally mobile employees continue to apply, including any EP Appendix arrangements.
How we can help
With mandatory payrolling starting on 6 April 2027, employers with globally mobile employees should use the time available to identify who may qualify, check their data and submit applications in good time. Our employment tax team can help you assess which employees are likely to be eligible, prepare and submit applications to HMRC, and review your payroll and benefits processes ahead of the new regime. If you would like to discuss how these changes affect your business, please get in touch with your usual HaysMac contact.
