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Benefits in kind & P11d

A benefit in kind is a reward to an employee, which is provided in a form other than money. Such benefits are liable to tax for most employees, recognising that they are part of the overall salary package.

Benefits usually take one of four forms:

  • an asset which is made available for your private use, with your employer purchasing or leasing the asset, and bearing the running costs. The asset may also have some business use. An example includes company cars, which are frequently provided for both business and private use by employees;
  • an asset which is purchased by your employer but given outright to you;
  • a facility or service provided free of charge, such as membership of a golf club or free hairdressing services;
  • personal bills paid by your employer.

You are also liable to tax on benefits provided by your employer or by reason of your employment to members of your family, unless they are employees in their own right. Even then, sometimes a benefit can be regarded as made available to you rather than your relative.

Where the benefit is provided to you by someone other than your employer you may still be liable to tax. This will be the case when the provision of the benefit is linked to your job in some way. Either the benefit is provided because you work for a certain employer, or the benefit is a prize or award to recognise something you did as part of your job. In both of these cases the benefit is taxable in the same way as if your employer provided it.

Moore Stephens can advise on a whole range of issues, including:

  • Company directors
  • Other employees
  • Tax free benefits
  • Expense payments
  • Form P11D
  • Tax-efficient remuneration packages
  • Common benefits and how they are taxed
    - Company cars, etc
    - Living accommodation
    - Private medical insurance
  • Travelling and other expense payments
    - Travelling expenses
    - Entertaining expenses
    - Home telephones
    - Using your own car for business
  • Other benefits
    - School fees
    - Vouchers
    - Company parties
    - Loan waivers
    - Assets provided for private use
  • Company share schemes
  • Profit related pay
  • Obtaining dispensations
  • National insurance implications
  • PAYE healthcheck

 

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