{"id":2052,"date":"2023-03-13T10:26:58","date_gmt":"2023-03-13T10:26:58","guid":{"rendered":"https:\/\/www.theukrules.co.uk\/?page_id=2052"},"modified":"2023-09-06T03:29:16","modified_gmt":"2023-09-06T03:29:16","slug":"employee-benefits","status":"publish","type":"page","link":"https:\/\/www.theukrules.co.uk\/rules\/business\/tax\/employee-benefits\/","title":{"rendered":"Expenses and Employee Benefits from Employment UK Rules"},"content":{"rendered":"<h3>What are Taxable Benefits in Kind HMRC?<\/h3>\n<p>There are different kinds of employee benefits, but perquisites are usually:<\/p>\n<ul>\n<li>Educational or governmental<\/li>\n<li>Employee incentive<\/li>\n<li>Family, retirement, or savings<\/li>\n<li>Health (e.g. private medical insurance)<\/li>\n<li>Lifestyle or recreational<\/li>\n<li>Transportation (e.g. company cars)<\/li>\n<\/ul>\n<p>In fact, the government sanctions some employee benefits &#8211; which means they are mandatory. Whereas, certain other benefits from employment are either supplementary or optional. They would not be part of, or included in, your salary cheque or wages.<\/p>\n<p>As a rule, it is the discretion of your employer that determines what supplementary benefits you may get. Among the most common are health insurance and pension coverage.<\/p>\n<p><\/p>\n<hr>\n<p><\/p>\n<h3>Tax Free Benefits in Kind UK<\/h3>\n<p>United Kingdom taxation does not apply to all benefits in kind. People earning less than their <a href=\"\/rules\/employment\/taxation\/income-tax\/rates\/\">standard personal allowance<\/a> would not get taxed on BIK. But, tax does apply to some &#8216;non-cash&#8217; benefits of monetary value &#8211; no matter what your income is!<\/p>\n<p>As the recipient of tax-free benefits in kind, there would be no need to enter it on a tax return. Typical examples of tax free employee benefits include:<\/p>\n<ul>\n<li>Certain arrangements of <a href=\"\/rules\/children\/childcare\/\">childcare for parents with children<\/a>.<\/li>\n<li>Counselling services offered to employees who are <a href=\"\/rules\/employment\/employing\/redundancies\/\">being made redundant<\/a>.<\/li>\n<li>Employer contributions paid into most approved occupational schemes or <a href=\"\/rules\/employment\/pensions\/personal-pension\/\">personal pensions<\/a> for employees.<\/li>\n<li>Equipment and facilities provided for disabled workers to carry out their job. Check the <a href=\"https:\/\/www.litrg.org.uk\/\" target=\"_blank\" rel=\"noreferrer noopener\">Low Incomes Tax Reform Group<\/a> for further information.<\/li>\n<li>Expenses for home removal if you must take up a new job or get <a href=\"\/rules\/employment\/employing\/contracts\/employer-relocation\/\">relocated by your employer<\/a> (up to \u00a38,000 per move).<\/li>\n<li>Most types of in-house sports facilities.<\/li>\n<li>Non-cash gifts from someone other than your employer (e.g. <a href=\"\/news\/business-and-finance\/accepting-free-invitations-may-breach-fca-hospitality-rules\/\">invitations to sporting events<\/a> up to \u00a3250 in a single tax year).<\/li>\n<li>Personal gifts (not cash) given for valid reasons unconnected with the job (e.g. retirement or wedding gift).<\/li>\n<li>Subsidies to public bus services or works buses used to transport employees to and from work.<\/li>\n<li>The provision of free or &#8216;cheap&#8217; canteen meals (if provided for all employees).<\/li>\n<li>The provision of bicycles and cycling safety equipment for employees to get to and from work. It should also apply to workplace parking for bicycles and for motorcycles.<\/li>\n<\/ul>\n<p><\/p>\n<hr>\n<p><\/p>\n<h3>Trivial Benefits in Kind<\/h3>\n<p>HM Revenue and Customs (HMRC) consider some benefits in kind as &#8216;trivial&#8217; &#8211; meaning they are not taxed. But, to qualify as a trivial benefit in kind, all these must apply to the perk or fringe benefit:<\/p>\n<ul>\n<li>It cannot be cash or a cash voucher and have a value less than \u00a350.<\/li>\n<li>It cannot be part of your <a href=\"\/rules\/employment\/contract-of-employment\/\">contract of employment<\/a>.<\/li>\n<li>It must not be a &#8216;salary sacrifice&#8217;.<\/li>\n<li>It must not be a reward or a bonus for doing well or &#8216;excelling&#8217; in your job.<\/li>\n<\/ul>\n<p><\/p>\n<hr>\n<p><\/p>\n<h5>ALSO IN THIS SECTION<\/h5>\n<p><\/p>\n<h3>Tax on Employee Company Cars<\/h3>\n<div class=\"category-wrapper\">\n<div class=\"normal-content-one\">\n<h5>Charging an Employee&#8217;s Electric Car<\/h5>\n<p>You might need to pay tax for charging an electric car used by an employee. You can check if you need to pay <a href=\"https:\/\/www.gov.uk\/expenses-and-benefits-electric-company-cars\" target=\"_blank\" rel=\"noreferrer noopener\">tax on employee&#8217;s electric car<\/a> and find out if they can get tax relief.<\/p>\n<\/p><\/div>\n<div class=\"normal-content\">\n<h5>Check or Update Company Car Tax<\/h5>\n<p>Anyone who pays tax on a company car can <a href=\"\/rules\/employment\/employing\/payroll\/notify-hmrc-of-a-company-car\/\">check or update company car tax<\/a> and then tell HMRC about the changes. Use &#8216;<a href=\"https:\/\/www.gov.uk\/diweddaru-manylion-car-cwmni\" target=\"_blank\" rel=\"noreferrer noopener\">Gwirio neu ddiweddaru&#8217;ch treth car cwmni<\/a>&#8216; for the Welsh version.<\/p>\n<\/p><\/div>\n<\/div>\n<div class=\"category-wrapper\">\n<div class=\"normal-content-one\">\n<h5>Working Out Taxable Value<\/h5>\n<p>Use HMRC company car fuel benefit tool to <a href=\"\/rules\/business\/tax\/employee-benefits\/work-out-tax-on-company-car\/\">calculate tax on employees&#8217; company cars<\/a>. It uses list price and carbon dioxide emissions to work out benefit in kind tax on company cars.<\/p>\n<\/p><\/div>\n<\/div>\n<p><\/p>\n<hr>\n<p><\/p>\n<h3>PAYE Expenses and Benefits<\/h3>\n<div class=\"category-wrapper\">\n<div class=\"normal-content-one\">\n<h5>Providing Benefits to Employees<\/h5>\n<p>There are various kinds of <a href=\"\/rules\/business\/tax\/employee-benefits\/employer-submissions\/\">expenses and benefits for employers<\/a> to report to HMRC and pay. Check how employment related expenses and benefits work for tax and national Insurance.<\/p>\n<\/p><\/div>\n<div class=\"normal-content\">\n<h5>PAYE Settlement Agreements<\/h5>\n<p>Having a <a href=\"\/rules\/business\/tax\/employee-benefits\/psa\/\">PAYE Settlement Agreement (PSA)<\/a> in place simplifies the reporting process for employers. Find out how PSAs allow annual payments to HMRC on some types of employee expenses and benefits.<\/p>\n<\/p><\/div>\n<\/div>\n<div class=\"category-wrapper\">\n<div class=\"normal-content-one\">\n<h5>Tax on Trivial Benefits (BIK)<\/h5>\n<p>The treatment of <a href=\"\/rules\/business\/tax\/employee-benefits\/trivial-benefits\/\">tax on trivial benefits in kind<\/a> varies. Check which conditions need reporting to HMRC and whether employers need to pay tax and National Insurance on them.<\/p>\n<\/p><\/div>\n<\/div>\n<p><\/p>\n<hr>\n<p><\/p>\n<h3>Providing Loans to Employees<\/h3>\n<p>Company and <a href=\"\/rules\/business\/tax\/employee-benefits\/providing-loans-to-employees\/\">employer loans provided to employees<\/a> will be subject to tax and reporting rules. Check what is exempt, what to report and pay, and how to work out the values.<\/p>\n<p><\/p>\n<hr>\n<p><\/p>\n<div class=\"updated-data\">\n  <strong>Employees Benefit Expenses Explained for United Kingdom<\/strong><br \/>\n  <time datetime=\"2022-01-01\">Last Updated 2022<\/time>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>What are Taxable Benefits in Kind HMRC? There are different kinds of employee benefits, but perquisites are usually: Educational or governmental Employee incentive Family, retirement, or savings Health (e.g. private medical insurance) Lifestyle or recreational Transportation (e.g. company cars) In fact, the government sanctions some employee benefits &#8211; which means they are mandatory. Whereas, certain&hellip; <a class=\"more-link\" href=\"https:\/\/www.theukrules.co.uk\/rules\/business\/tax\/employee-benefits\/\">Continue reading <span class=\"screen-reader-text\">Expenses and Employee Benefits from Employment UK Rules<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"parent":646,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"inline_featured_image":false,"footnotes":""},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Expenses and Employee Benefits from Employment UK Rules - UK Rules<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.theukrules.co.uk\/rules\/business\/tax\/employee-benefits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Expenses and Employee Benefits from Employment UK Rules - UK Rules\" \/>\n<meta property=\"og:description\" content=\"What are Taxable Benefits in Kind HMRC? There are different kinds of employee benefits, but perquisites are usually: Educational or governmental Employee incentive Family, retirement, or savings Health (e.g. private medical insurance) Lifestyle or recreational Transportation (e.g. company cars) In fact, the government sanctions some employee benefits &#8211; which means they are mandatory. 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There are different kinds of employee benefits, but perquisites are usually: Educational or governmental Employee incentive Family, retirement, or savings Health (e.g. private medical insurance) Lifestyle or recreational Transportation (e.g. company cars) In fact, the government sanctions some employee benefits &#8211; which means they are mandatory. 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