Benefits in kind

Benefits in kind are assessed on the employee and are reported at the end of each tax year on a form P11D.

In addition to income tax being due on all the benefits, Class 1A national insurance contributions are due on the car and fuel benefits. The NICs are payable by the employer. Since 6 April 2000 NICs have been due on the other benefits (e.g. private medical care, cheap loans etc), which is also payable by the employer.

Benefits that are taxed on all employees, certain individuals and exemptions are listed below (certain rules will apply).

Benefits taxable on all employees:

• unapproved share option schemes
• non cash vouchers
• living accommodation
• PAYE due on non-cash items (e.g. cash voucher).

Benefits taxable on employees earning over £8,500 per year and directors:

• company cars available for private use
• vans available for private use
• interest free and low interest loans (applies to balances over £5,000)
• certain scholarships
• gift/loan of assets from employer
• private medical insurance.

Benefits not normally taxable on employees:

• free or subsidised canteen meals if made available to all employees
• car parking spaces at or near work
• certain home to work travel expenses
• specified removal and relocation expenses up to £8,000 per move.
• certain workplace nurseries
• living accommodation in specific circumstances
• training courses
• Christmas parties and similar functions within set monetary limits
• long service awards
• awards under staff suggestion schemes (up to a maximum of £5,000).
• certain sports facilities
• employer's contributions to an approved or statutory pension scheme.
• membership fees and subscriptions paid to approved professional bodies.
• routine health checks and medical screening.
• protective clothing necessary for job, or a recognisable uniform required to be worn.
• small personal expenses paid by your employer when away overnight on business (max £5 per night, £10 outside the UK)
• gifts and goods from business contacts costing up to £150.