Tax Free Benefits in Kind

24th January 2010

Certain benefits in kind still remain entirely tax free, and can be used in flexible remuneration and/or salary sacrifice situations:

  • Pension scheme contributions (up to £40,000 per employee per annum, plus potential ‘catch-up’ from previous 3 years).
  • Childcare vouchers or employer supported childcare (up to £55 per week, depending upon personal tax status),
  • Use of a bicycle for mainly home to work commuting and other business use, which is available to all employees,
  • Mobile phones, for both business and private use, where the contract is between the employer and the supplier,
  • Interest free loans of less than £10,000 throughout the year,
  • Free or subsidised meals provided on the employer’s premises, which are available to all staff,
  • Expenses incurred in the provision of any death in service life assurance 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 death (no longer capped at x 4 salary),
  • Places in nurseries on premises made available and managed by the employer,
  • Contributions towards ‘Use of Home as Office’ (£4 per week without the need to keep supporting evidence of cost),
  • 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,
  • 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,
  • 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.
  • Guaranteeing a personal debt.
  • Using the business purchasing power to obtain discounted personal goods/services, which are reimbursed by the individual.

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 items in Blogs
 
Victor Courdelle
15th October 2018 If HMRC Can’t Say, Who Can? – Records Required for ‘Cash Accounting for VAT’ Under MTD

Reference to VAT Notices 700/21, 700/22 and 731 suggests that a business using Cash Accounting for VAT under Making Tax Digital will be required to:- Maintain digital accounting records at transaction level: Keep a digital VAT account using Accrual accounting; Cross reference Monies Received and Paid against individual Sales and Purchase invoices within their digital…

Read More »

Thomas Carter
12th October 2018 How to choose a business structure

Are you thinking about setting up a business?  If so, one of the first decisions you will need to make is that of business structure. The main business structures are: sole trader, partnership, limited liability company, and limited liability partnership (LLP). Sole trader – This is the easiest set up, with very little in the way of red…

Read More »

Richard Alecock
11th October 2018 Why a start up business should complete a business plan

A business plan is a written document that describes your business. By committing your thoughts to paper, you can understand your business better and also map specific courses of action that need to be taken to improve your business. It covers objectives, strategies, sales, marketing and financial forecasts. A business plan can help you to:…

Read More »

Richard Alecock
11th October 2018 Making Tax Digital, VAT and newly registered businesses

All VAT registered businesses with a turnover over the current VAT registration threshold of £85,000 will be required to comply with the Making Tax Digital (MTD) record keeping and reporting requirements for VAT periods which start on and after 1st April 2019. Where a business is VAT registered but has turnover under £85,000 at April…

Read More »

Matilda Mawson
5th October 2018 Have you elected not to claim child benefit?

You may wish to consider the implication this could have on your state pension in later life. Following the introduction of the high income child benefit charge in January 2013 many new parents have decided not to make a claim for child benefit as their individual income is well above the threshold to be fully…

Read More »

Victor Courdelle
4th October 2018 Working With Award Winning Software

We are delighted to announce that two of our chosen software providers have just won national recognition in the 2018 Accounting Excellence Software Awards held in London on 20 September: Xero Accounts – Winner – Accountancy Excellence Awards 2018: Small Business Accounting Software of the Year, Practitioners’ Choice. Receipts Bank – Winner – Accounting Excellence…

Read More »