Benefits in Kind Fact Sheet
What is it? Benefits in kind are benefits that employees receive from the company, organisation or business they work for - separate to their salary.
These include things such as company cars, medical insurance or even cheap loans.
Tax-free benefits in kind Some of the benefits in kind will not be taxed.
This means that if you are doing your tax return or having an accountant do your book keeping for you then these do not need to be included.
Tax-free benefits in kind include: • In-house sports facilities • Work buses for employees • Cycling equipment provided to employees to commute • Gifts that aren't cash such as tickets to events, as long as it's not more than £250 in one year • Counselling services to employees There are many more tax-free benefits, and if you are in doubt, you should speak with an accountant or your employer who are able to assist you with any of these matters.
Taxable benefits in kind These are taxed based on the cash equivalent value.
This is how much it costs your employer to give you the benefit.
There are exceptions, but again, this is something your accountant will be able to discuss with you.
Common benefits in kind Benefits in kind can vary from place to place.
Here are some of the most common ones.
• Accommodation If you are provided with somewhere to stay, the value of the property over a certain period of time (a year) is taxable • Hotels The cost of hotels or temporary accommodation when you are travelling for the business is not taxed.
If an employee is given a cash allowance for this, this will be taxed.
• Cars If you are given a car purely for the business then it is not taxable, but if it is available for private use by an employee, it is chargeable for tax • Childcare Sometimes, employers have childcare schemes, meaning a nursery at work.
This is completely tax free, but if you are paying for childcare services yourself, it is taxable • Fuel This is different to expenses, if your employer pays for your fuel for personal use, it is taxable How to declare tax If you get any benefits in kind that are taxable and you are the required to complete a tax return, you must enter them into the employment page of your return, if you hire an accountant, they can show you how to do it.
These include things such as company cars, medical insurance or even cheap loans.
Tax-free benefits in kind Some of the benefits in kind will not be taxed.
This means that if you are doing your tax return or having an accountant do your book keeping for you then these do not need to be included.
Tax-free benefits in kind include: • In-house sports facilities • Work buses for employees • Cycling equipment provided to employees to commute • Gifts that aren't cash such as tickets to events, as long as it's not more than £250 in one year • Counselling services to employees There are many more tax-free benefits, and if you are in doubt, you should speak with an accountant or your employer who are able to assist you with any of these matters.
Taxable benefits in kind These are taxed based on the cash equivalent value.
This is how much it costs your employer to give you the benefit.
There are exceptions, but again, this is something your accountant will be able to discuss with you.
Common benefits in kind Benefits in kind can vary from place to place.
Here are some of the most common ones.
• Accommodation If you are provided with somewhere to stay, the value of the property over a certain period of time (a year) is taxable • Hotels The cost of hotels or temporary accommodation when you are travelling for the business is not taxed.
If an employee is given a cash allowance for this, this will be taxed.
• Cars If you are given a car purely for the business then it is not taxable, but if it is available for private use by an employee, it is chargeable for tax • Childcare Sometimes, employers have childcare schemes, meaning a nursery at work.
This is completely tax free, but if you are paying for childcare services yourself, it is taxable • Fuel This is different to expenses, if your employer pays for your fuel for personal use, it is taxable How to declare tax If you get any benefits in kind that are taxable and you are the required to complete a tax return, you must enter them into the employment page of your return, if you hire an accountant, they can show you how to do it.
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