A large number of employee benefits are subject to tax and National Insurance Contributions, but not all are taxable. Benefits that aren’t taxable have strict criteria which should be met, or you could find yourself being taxed. Even if a benefit isn’t liable to tax, it may still be chargeable for national insurance.
Some benefits may only be taxable if there is an element of private use. For instance, a company van which is available for business and private use will automatically have a charge of £3,000. If the van is only used for business but you take it home without any private use, the benefit isn’t taxable. If a benefit isn’t subject to tax, a dispensation will mean that it doesn’t have to be recorded on a form P11D.
Among the most significant benefits that aren’t taxable are parking facilities for a car, motorcycle or bicycle at or near the workplace. Facilities for child care or vouchers with a value up to £55 a week for basic rate taxpayers are not taxable. Redundancy or termination payments up to £30,000 are not taxable. Luncheon vouchers with a value of not more than 15p per day or canteen facilities are not chargeable to tax, and if sports facilities are made available to all staff they are also tax free.
There are many employee benefits which aren’t subject to tax and will maximise remuneration for employees. It is crucial to check whether a benefit is taxable, and that you meet all relevant criteria to remain tax free.
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox