Tax Free Benefits in Kind

7th August 2019

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),
  • Provision of a company vehicle:
    • For pool use on business related travel only.
    • If a van (including a twin cab pick-up), for use:
      • For business related travel,
      • For ordinary commuting to and from work,
      • Insignificant private use.
    • With effect from 6 April 2020, for business and private related travel, if zero emissions.
  • 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,
  • Christmas or other annual parties where the cost to the employer does not exceed £150 per head,
  • Sports facilities or gym 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.
  • Mileage allowance not exceeding HMRC approved rates for business related travel.
  • Discounted employer goods or services or free access to employer facilities.
  • Health screening or check-ups.
  • Work-to-home travel when working late.
  • Counselling.
  • Shareholder advice in relation to buying the company’s own shares.
  • Retraining provision for redundancy.
  • Support for commuting for disabled staff.
  • Gifts received by the employee from third parties (eg customers).

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
 
Ruth Pearson
17th October 2019 Is it too early to talk about Christmas!

In December 2018 HMRC wrote to employers to advise of a temporary easement on reporting PAYE information in real time. This was for a number of reasons, one of which could be due to businesses closing over the Christmas period and therefore having to pay staff earlier than normal.   HMRC have received feedback from…

Read More »

Chris Kelly
8th October 2019 Whiting & Partners advises Lettings Agency on finding its new Home

Whiting & Partners, The Corporate Finance Network’s representative firm in Suffolk has advised a well-established lettings agent on its sale to a national group.   The Whiting & Partners Corporate Finance team were approached by their client when they decided to explore opportunities to sell their agency. The team, led by Corporate Finance Partner, Chris…

Read More »

Matilda Mawson
2nd October 2019 Class 2 National Insurance – HMRC’s ongoing issues

July 2015 saw the end of direct debit collection for Class 2 National Insurance. Contributions are now collected through self-assessment and, despite there being 4 years since the change in the way payments are made, HMRC are still having teething problems. The issues arise as HMRC are running two computer systems side by side: national…

Read More »

Ian Piper
1st October 2019 New Off-Payroll Working Tax Rules: Y/N?

Readers, particularly knowledge based contractors working through their own personal service companies, will hopefully now be familiar with the new ‘off-payroll working’ tax rules being introduced in the private sector on 1 April 2020. These are being introduced as part of the Government’s general strategy over recent years to eliminate tax avoidance, tax evasion, and…

Read More »

Richard Alecock
12th September 2019 “Get ready for Brexit” workshops

  The Department for International Trade is hosting “Get ready for Brexit” workshops across the East region, each running from 11:30 – 13:30 followed by a networking lunch.   Please see the link below for dates and venues.   http://x.email.ukti.gov.uk/ats/msg.aspx?sg1=6a523609b267f7129747b384f8f21e3e

Read More »

Steven Denton
10th September 2019 Employer allowance – is it worth the hassle?

The £3000.00 employer allowance ceases at the end of the current tax year. From April 2020 employers will have to re-apply for a di minimis state aid based allowance.   A new HMRC checklist will have to completed to declare the following;   NIC contributions in the previous tax year were beneath £100,000; Confirmation that…

Read More »