Employee Benefits in Kind

Definition: Benefits in kind are the things provided to an employee on top of their salary that are considered to benefit the employee. If they are part of the employment package and can be translated to a monetary value then they can be taxed.

This tax is added to your income tax and is usually taken by adjusting your tax code that is used to calculate your tax free allowance.

Taxable Benefits in Kind

Taxable benefits include:
  • Private use of a company car including travel between home and work. The taxable value is calculated according to the car value, fuel type and C02 emissions.
  • Private use of a company van not including travel between home and work. There is a set charge of £3,000.
  • Car Fuel for private use including travel between home and work.
  • Van Fuel for private use not including travel between home and work. There is a set charge of £500.
  • Clothing (not including protective clothing or overalls)
  • Interest free loans or loans where the interest is less than 4.75% (from 1st March 2009) and the loan amount is more than £5000.
  • Health or Life Insurance provided by your employer

Exclusions

If you are paid less tan £8,500 per annum including the value of your taxable benefits and you are not a company director then you do not pay tax on your benefits.

Non Taxable Benefits in Kind

Note that there may be specific exclusions appling to the following non taxable benfits. Please see Government web site for full details.
  • Employer Contributions to your personal pension scheme
  • Free or reduced price food and drink
  • Various travel benefits including subsidies for using public transport
  • Relocation assistance connected with work up to £8,000
  • Equipment to assist disabled persons carry out their job
  • Gifts related to your employment but not from your employer up to £250 per annum
  • A bike and safety equipment
  • Free parking at work
  • Assistance with childcare
  • Mobile phone if contract is in employers name
  • PDA, Computer, Laptop
  • Subsistence expenses when away from home on business
  • Company Parties (annual)
  • Interest Free or reduced interest loans less than £5000
  • Gym membership fees
  • A private number plate for a company car
  • Eye tests and medicals
  • Training
  • Childcare vouchers up to £55 per week (rules apply)
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Updated on 24th November, 2009

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