Benefits in Kind (BIK)

A P11D form is a document from HM Revenue & Customs (HMRC) used by an employer to annually report certain expenses and benefits paid or made available to employees / directors.

The rules surrounding BIK’s are complex, and each case needs to be considered individually to determine whether benefits are taxable or not.

Find Out More

The following are some of the main types of BIK’s that are taxable:

A company car (and fuel) and/or vans (and fuel) provided to employees / directors.
Private medical insurance.
An employee’s assets that are primarily used personally.
Provision of living accommodation.
Low or interest free loans made to an employee.

There are various tax-exempt benefits including:

Employer contributions to a registered pension scheme
Training costs
Functions/Events costing below £150 per head
Car parking at or near place of work
Trivial benefits i.e.;
1. It costs £50 or less to provide
2. it is not cash or a cash voucher
3. it is not in the terms of their contract
4. it is not a reward for their work or performance

Class 1A Employers National Insurance is payable at the rate of 13.8% and due by 19 July following the end of the tax year. For directors/employees, the value of the BIK is taxed as employment income at their marginal rate, and this will be reflected in their PAYE tax code.

Furthermore, a company will need to submit a P11D(b) form, which summarises the P11D forms completed for each employee and the amount of National Insurance due for payment.

Both P11D and P11D(b) forms need to be submitted by 6 July following the end of the relevant tax year.

Key Deadlines:

– 31 May – P60s to be provided to employees
– 6 July – P11D and P11d(b) to be submitted to HMRC and P11ds to be provided to employees
– 19 July – Class 1A National Insurance payment due (If paid electronically then payment is extended to 22 July.

Alternative

An employer can opt for payrolling of benefits which taxes benefits in kind via payroll during the year.

All taxable benefits can be potentially payrolled apart from employer provided living accommodation and low or interest free employer provided loans.

Where an employer opts for payrolling benefits in kind, this must be done before the start of the tax year in question.

For employers who opt for payrolling benefits, there is still a requirement to calculate and pay the Class 1A NIC due and submit the annual form P11D(b).

We are more than happy to assist with any plans you may have to provide benefits to employees.