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Benefits in kind guide

We cover benefits in kind with this handy guide

This guide will help you work out what counts as a benefit, and whether you’ll need to report it to HMRC.

A benefit in kind is a benefit which employees or directors receive from their company of employment, but which are not included in their salary or wages. They are also sometimes called ‘perks’ or ‘fringe benefits’. Some benefits in kind will not be taxed, whereas some will be taxed only for people who are not in lower paid employment, and some will be taxed for everyone, whatever their income might be.

When you receive anything from your company that’s not “wholly, exclusively and necessary” to your business, it is likely to be classed as a benefit In kind. You may be liable to pay Income Tax as an employee and National Insurance Contributions as an employer on any benefit you receive.

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Benefits in kind guide

by Nick Chowdrey

Get guide

What you’ll learn

  • What counts as a benefit in kind
  • When you have to report a benefit in kind to HMRC
  • When you are exempt from reporting a benefit in kind

Contents

  • What is a benefit in kind?
  • What needs to be reported?
  • Statutory exemptions
  • Dispensations