
Katie Bunting
Taxable Benefits
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 they need to put on a P11D form at the end of the tax year or can be added to payroll - something called Payrolling Benefits.
Taxable Benefits and Facilities include:
the provision of living or other accommodation, including lights, heat, rates and domestic or other services
the use of any asset provided by the employer or another person acting on the employer's behalf, for example, the use of a motorcycle, an aircraft or yacht,
the provision of fuel for private motoring in a provided car
gifts of assets to the employee, or the sale to the employee of assets at less than their market value (this applies not only to assets such as a car or a house, but also to goods such as clothes, TV sets, wines or groceries)
any non-exempt expenses or liabilities incurred by the employee and paid direct by the employer, for example, hotel or restaurant bills
Income Tax not dedcuted from employment income paid to a director, but paid to HMRC by the employer and not reimbursed by the director
scholarships awarded to students by reason of their parents' employment
hotel accommodation and restaurant facilities arranged by the employer
holidays and childcare
shooting, fishing and other sporting facilities
work carried out at the employee's residence
Benefits to which special taxing rules may apply:
cars and vans available for private use
loans
certain arrangements in connection with share incentive schemes
scholarships
tax not deducted from employment income paid to directors
certain arrangements for providing employment income through third parties
For a list of non-taxable supplies please see our blog post linked below:
https://www.mycloud-accounts.co.uk/post/non-taxable-benefits