Payments made on behalf or to employees fall under two categories: taxable and non-taxable. Knowing the difference can save you and your employees tax. Please see below for examples of employee expenses that are usually non-taxable, therefore no need to put them on P11D or add to payroll.
For a full up to date list please check HMRC website.
Non-taxable Benefits include but not limited to:
If you are already planning your christmas party you will be pleased to know that you can spend up to £150 per head without incurring tax liabilities. Spend limit applies to annual parties at Christmas or alternative functions of a similar nature.
Costs which an employer incurs like any other buyer, in connection with the purchase of an asset from an employee.
Employees with a disability are not taxable on the benefit of the private use of equipment or services provided by their employer to enable them to take up or to continue work (for example, a wheelchair or hearing aid). Equipment provided solely to carry out the duties of employment are exempt above) but where equipment is also used outside work so that private use is significant, that exemption does not apply.
A maximum of one health-screening assessment and one medical check-up in any year.
-‘Health-screening assessment’ means an assessment to identify employees who might be at particular risk of ill-health.
-‘Medical check-up’ means a physical examination of the employee by a health professional for (and only for) determining the employee’s state of health.
Where an employee is provided with a taxi paid for by his employer for a journey from work to home
Free or subsidised meals provided on the employer’s business premises, or in any canteen where:
-meals are provided for the staff generally, or a ticket or token is used to obtain such meals, and
-the meals are provided on a reasonable scale, and
-either all employees may obtain free or subsidised meals on a reasonable scale, whether on the employer’s premises or elsewhere, or the employer provides free or subsidised meal vouchers for staff for whom meals are not provided
The provision of 1 mobile phone provided by an employer to an employee (but not if provided to a family or household member) including any line rental and calls for that phone paid directly by an employer, unless any of these can be converted into money by the employee. Money an employer pays to an employee to use their own mobile phone is taxable.
The cost of transport (for up to 60 journeys in the year) which an employer provides to take an employee home. (Subject to criteria that can be found on HMRC website)
Sports facilities generally available to the employers employees and members of their families and households.
Strictly all benefits are subject to tax and NICs, unless there is a specific exemption. However, sensible practical administration of the tax system determines that benefits of a trivial nature (for example, a seasonal gift of a turkey or an ordinary bottle or two of wine) should not be charged as a benefit. Anything more lavish in quality or quantity remains chargeable.
For a list of Taxable Benefits, please look at our Taxable Benefits blog post - linked below: