These are benefits that employees or directors receive from their employment but which are not included in their salary cheque or wages.
Employers have to report benefits annually to HMRC using form P11D. P11D’s for 2018/19 must be filed with HMRC by 6 July 2019.
Some benefits in kind are tax-free. These include employer pension contributions, work buses, car parking at or near to your place of work, bicycles and cycling safety equipment.
Whereas other benefits are taxable, the most common examples are cars and vans, vehicle fuel, private medical or dental insurance, accommodation received rent-free or at a reduced rate.
Employers can now choose to payroll most benefits in kind, which means that they are subject to PAYE via the payroll each month. This means that there is no need to prepare forms P11D for employees. Employers must make this choice and inform HMRC prior to the start of the tax year.
Employees in receipt of taxable benefits in kind, who complete a tax return, must enter the value of the benefits into the Employment page of their tax return for the relevant year, even if tax has already been paid on the benefits under PAYE.
For more information, contact Lesley Sutton on 01484 550037 or email firstname.lastname@example.org.