Non-Taxable Benefits in Kind

Tightening of payroll legislation over recent years has resulted in the current situation where most 'perks' of employment are subject to income tax and, often, both primary and secondary national insurance contributions also. Certain transactions, however, still remain entirely tax free, the more useful of which for remuneration package structuring are as follows:

• Free or subsidised meals provided on the employer's premises, which are available to all staff,
• Meal vouchers issued to employees, which do not exceed 15p per day,
• Expenses incurred in the provision of any pension, annuity, lump sum, gratuity, or similar benefit given to an employee or to any member of the employee's family or household on the employee's retirement or death,
• Places in nurseries on premises made available and managed by the employer,
• Contributions towards 'Use of Home as Office' (£3 per week without the need to keep supporting evidence of cost),
• Childcare vouchers or employer supported childcare (up to £55 per week),
• Contribution towards incidental overnight expenses, when you stay away from home for at least 1 night on a work journey,
• Job related living accommodation,
• Trivial benefits, including a small gift in recognition of a particular event (eg marriage or birth of child), a seasonal gift or provision of free tea and coffee.
• Long service awards, for those with over 20 years service, where the cost does not exceed £50 per year of such service,
• Awards to employees under formally constituted suggestion schemes,
• Provision of a parking space at or near the employee's place of work,
• Provision of subsidised public road transport to and from work, which is available to all employees,
• Use of a bicycle for mainly home to work commuting and other business use, which is available to all employees,
• Annual parties where the cost to the employer does not exceed £150 per head,
• Sports facilities made available to employees which are not available to the general public,
• Mobile phones, where the contract is between the employer and the supplier,
• Certain work related training expenses,
• Removal expenses resulting from a change in job, up to the first £8,000,
• The personal use of an employer's computer, in certain circumstances.

As with all exemptions provided under statute or extra statutory concession, care is required to ensure that the actual circumstances fall within the precise criteria laid down. Our tax team are able to assist clients in structuring transactions to fully utilise these ever-diminishing tax exemptions.

Other Practical Examples of our Benefits in Kind Expertise

Preparing P11d's and calculating the class 1a NIC liability once a year. Minimising the tax on company cars.

Advising on salary sacrifice and employer funded pension contributions. Optimising remuneration packages, generally.