New Tax Year, New Rules: What the 2026/27 Changes Mean for HR Teams

April signals the start of a new financial year and this time, it brings some of the most significant changes UK employers have faced in years. From day-one statutory rights and rising wage costs to major reforms in how benefits are reported and taxed, the 2026/27 tax year places new operational and strategic demands on businesses and HR teams in particular.

For many employers, this isn’t simply about staying compliant with legislation. It’s an opportunity to rethink how your benefits are designed, communicated and delivered in an increasingly complex landscape.

To help, we’ve pulled together an overview of what’s changed, what you need to do now, and how Personal Group can support you.

One of the biggest changes affecting benefits administration is HMRC’s move towards real-time reporting of Benefits in Kind (BIKs). From April 2026, employers can choose to voluntarily payroll most benefits in preparation for mandatory payrolling in April 2027, when P11Ds will largely be phased out.

What this means for your organisation:

• Benefit data must be accurate, up to date and available throughout the year
• Errors now could affect employee net pay in real time, increasing employee queries
• Tracking benefits and data across multiple systems increases the chance of mistakes and extra admin.

What HR teams can do now:

• Audit your current benefits to understand which are taxable, exempt or poorly understood
• Assess whether your current systems can support ongoing reporting
• Simplify your benefit design ahead of mandatory payrolling to reduce admin and error

From 6 April 2026, Statutory Sick Pay (SSP) became a day-one right, with the Lower Earnings Limit removed. SSP is now payable at 80% of average weekly earnings or £123.25 per week (whichever is lower).

Why this matters for your benefits strategy:

• More employees qualify, including part-time and lower-paid workers
• As an employer, you could face higher short-term absence costs
• Your contractual sick pay policies may no longer align with statutory frameworks

Actions you can take:

• Review your sick pay policies alongside the wellbeing and protection benefits you offer
• Ensure your line managers understand the new absence rules
• Consider preventative health support rather than reactive absence management

From April 2026, the National Living Wage increased to £12.71 per hour for workers aged 21 and over, with significant uplifts across younger age bands. At the same time, Income Tax and National Insurance thresholds remain frozen, continuing the impact of fiscal drag.

The result:

• Pay budgets are coming under significant pressure
• Employees may feel worse off despite higher nominal wages
• Many HR teams are being expected to “do more” for engagement without increasing spend

When pay rises are limited and costs are going up, benefits can be a key tool in showing employees they’re valued and supported.

From April 2026, several family-related rights became available from day one of employment, including:

• Statutory paternity leave
• Unpaid parental leave
• Bereaved partner’s paternity leave
• While welcomed by employees, for businesses these changes are likely to increase:
• Policy complexity
• Manager queries
• The need for clear, accessible employee guidance

Benefits and clear employee communications now play a vital role in helping employees understand what they’re entitled to and when.

The start of the new tax year brings several changes together at once, and the combined impact is being felt most acutely by HR teams. There is more compliance to manage,

more questions coming from employees, and increasing cost pressure across pay and benefits.

With new statutory rights, tighter reporting rules and benefits more closely linked to payroll, there is little room for error. At the same time, employees are more likely to query their pay, tax and benefits as deductions become more visible and cost of living pressures continue. This adds to HR workloads and makes complex or poorly communicated benefits harder to manage.

All of this is happening while budgets remain under strain. Employers are facing higher wage costs and expanded statutory payments, yet employees still expect meaningful support with wellbeing, protection and financial security.

That’s why the start of the tax year is the right moment for HR teams to pause and review their approach to benefits. It’s an opportunity to audit what you have in place, remove benefits that are rarely used or overly complicated, and simplify the overall offering. From there, your benefits can be reshaped to focus on what really matters to employees today - supporting wellbeing, offering protection when it’s needed, and helping people feel more financially resilient - often without increasing your overall spend.

At Personal Group, we support HR teams facing exactly these challenges. We work with employers of all sizes and sectors to:

Audit what you’ve got

We start by reviewing your current benefits portfolio to:

• Identify gaps, duplication and low-value benefits
• Assess tax efficiency and administrative burden
• Understand how well your benefits align to your workforce’s needs

Redesign your programme to suit your people

We help HR teams re-shape existing spend into benefits that employees actually value, especially those that support:

• Health and wellbeing
• Financial education and protection
• Everyday cost-of-living support

Add value at no or little cost to you

Through Hapi, our award-winning platform, you can introduce:

• Face-to-face wellbeing and support services
• Insurance options and employee protections
• Voluntary benefits and discounts

At no or little direct cost to you, helping HR teams demonstrate meaningful investment without adding budget pressure.

Reduce HR Admin

Our digital platform supports:

• Clear benefit visibility for employees
• Centralised management for HR
• Reduced queries during busy periods like the start of the tax year

The 2026/27 tax year has increased the demands on HR more than ever – you’re expected to be compliance experts, cost managers and employee advocates. But with the right support, these changes can become an opportunity to:

• Modernise your benefits
• Improve employee engagement
• Reduce long-term HR admin and workload

If you’re reviewing your benefits strategy this tax year, Personal Group is here to help you make it simpler, smarter and more impactful.