What is a taxable benefit in kind?

A Benefit in Kind (BIK) is any non-cash benefit of monetary value that you provide for your employee. These benefits can also be referred to as notional pay, fringe benefits or perks. The benefits have monetary value, so they must be treated as taxable income.

What is a P11D expenses and benefits form for?

A P11D is a statutory form that is needed by the tax office to show the value of your end of year expenses also known as company benefits. Your employer will submit the P11d form each tax year to the tax office directly, and should give you a copy for your records.

How do I report benefits in kind?

How do you report a benefit in kind? Benefits in kind are reported on a P11D form; as the benefit effectively increases your salary, there may be National Insurance contributions to be paid on them. It’s important to note that these contributions will be paid by the company, rather than the individual.

Are expenses a benefit in kind?

If your limited company incurs costs or provides assets for the private use of directors or employees, or reimbursed expenses not wholly and exclusively for the purpose of your trade are incurred, they are classed as a Benefit in Kind.

What are examples of benefit in kind?

Benefits-in-kind. These are benefits that an employee receives that cannot be converted into cash but have a cash value. Examples include provision of a company car, loans given at a special rate or provision of accommodation.

Are company mobiles a benefit in kind?

There is no benefit in kind on the provision of the mobile phone as there is a specific provision in Section 319 ITEPA 2003 to exempt such a benefit from income tax. HMRC will expect this benefit to the employee to be “grossed-up” and this can lead to a very expensive settlement for the business.

What do you need to know about Form P11D?

A form P11D is used to report to HMRC the employment benefits (Benefits in Kind) company directors and employees have received over the year. The form is more relevant to employers – companies must submit their forms to HMRC every tax year.

When do I need to submit a P11D ( B ) to HMRC?

If HMRC have asked you to submit a P11D(b), you can tell them you don’t owe Class 1A National Insurance by completing a declaration. You can deduct and pay tax on most employee expenses through your payroll (sometimes called ‘payrolling’) as long as you’ve registered with HMRC before the start of the tax year (6 April).

Is it worth running both P11D and payroll?

Running both payroll and the old fashioned P11D forms costs time as well as money. Off the back of this, it’s sensible to ask if you have the infrastructure in place to triage any administrative errors that are part and parcel of running a new system. Payroll’s advantage is its convenience and efficiency.

When do I need to report benefits in kind to HMRC?

This is one method of reporting the cash value of your benefits in kind package to HMRC. It is one way that HMRC calculate the income tax and national insurance contributions that are due from your employee benefits package. This form needs to be submitted at the end of every tax year and is available on the ‘.gov’ website. What is payrolling?