Benefits in Kind
Benefits in kind are benefits which employees or directors receive from their employment but which are not monetary benefits such as salary, bonuses, commission etc. It is designed to levy income tax on the value of the non-cash benefits such as a company car, private medical insurance (if it’s paid for by your employer) and subsidised or free loans. Some benefits in kind are not taxed such as in house sports facilities, the staff canteen (so long as it is available for all employees), transport or subsidies to help employees get to work, parking, reasonable removal expenses if you ask an employee to move home to be closer to work etc. Benefits in kind are generally not taxed if you earn less than the personal allowance.
Benefits in kind are sometimes referred to as P11D benefits, which is the form that companies fill in to declare the benefits you have received to HMRC. HMRC then normally charge you for these benefits through a change to your tax code which reduces your personal allowance and makes more of your income chargeable to tax. This has the effect of making you pay income tax on the HMRC calculated value of the benefit in kind.
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