Don’t hold back, says Tony Byrne, managing director of Wealth & Tax Management. Take advantage of tour entitlement.
If you receive any other benefits as part of your employment in addition to your salary, it may be the case that you are receiving a benefit in kind. You might see it as a workplace perk or sometimes they are referred to as ‘fringe benefits’.
But you need to be aware that, although they can seem like a nice added bonus, they may not necessarily come for free.
What are tax-free benefits-in-kind?
Tax-free BIKs are possibly the most common benefits you are likely to encounter, for the very reason that they are tax free. Neither the employee nor the employer is required to pay additional tax as a result of these benefits.
Below is not an exhaustive list but just some of the most popular that you are likely to come across:
- Employer contributions to an approved workplace or personal pension scheme;
- Employer contributions into a life insurance policy known as relevant life insurance;
- Subsidised canteen meals so long as this is offered to all employees;
- In-house leisure facilities such as gym, pool table or other entertainment;
- Other in-house facilities such as childcare services at your place of work;
- Staff parties so long as every employee is invited and cost per person is not more than £150 per year;
- Bicycles and cycling equipment as part of the Cycle to Work scheme;
- Gifts for reasons that are unconnected to the performance of your job, such as birthday, wedding or retirement (the value of these gifts should not exceed £250 in a single year);
- Trivial benefits which are less than £50 in value and are not cash or cash vouchers such as free coffee and tea in the office;
- Office or workplace car park;
- Uniform or safety equipment provided which is necessary for you to complete your job.
For a comprehensive list of tax-free employment benefits, click here.
Fully electric cars – cars with zero carbon dioxide emissions – had a zero benefit in kind tax charge for 2020/21 but for 2021/22 the taxable BIK is still only 1% of the value of the vehicle when it was new. Next tax year the BIK tax charge rises to 2%.
So even though fully electric cars have become once again subject to BIK taxation they are still a relatively cheap benefit in kind so are worth mentioning.
So if your employer does not offer a tax-free BIK or a fully electric company car, why not ask for such benefits? What have you got to lose? You know it makes sense.
If you are interested in discussing tax-free benefits in kind, join us for a one-hour Discovery Meeting either at our offices or by a video conference call at our expense worth £270 to each of the first three readers who contact us before August 31. You know it makes sense. We offer a great cup of coffee too – but, unfortunately, not a virtual one.
Ring us on 01908 523740 or for free on 0800 980 4516 or email email@example.com.
*The contents of this article are for information purposes only and do not constitute individual advice.