About benefits in kind

What a benefits in kind is and how it's taxed

As an employee, you pay tax on employment benefits like vehicles and accommodation.

Benefits in kind are anything you (or a member of your household) receive, which is not money, from your employer.

These are provided either free or below the normal cost like free accommodation or discounted shares.

Paying tax on employment benefits

Tax isn't deducted at the time you receive your benefit. Your employer will provide you with a benefit in kind statement at the end of the year and you declare the total amount on your personal tax return.

A standard tax deduction is given against benefits in kind, but you may need to make a payment to cover the tax due, especially if the value of the benefit(s) you receive is substantial.

Allowances, reliefs and deductions for income tax

Exempt benefits in kind

There are some benefits in kind which are exempt from tax.

Exemptions from benefits in kind

Other taxable amounts

Any allowances, cash payments or reimbursement of out of pocket expenses are not benefits in kind, but part of your salary.

Employment income and tax

Personal tax return help

Your employer should give you a summary of any taxable benefits you receive so that you can declare them correctly on your tax return.

Filling out your personal tax return

Benefit in kind information for controlling directors

Controlling directors are taxed on benefits in kind in the same way as an employee. The benefit in kind legislation includes all 'office holders' which covers directors of companies as well as employees.

Refusing a benefit in kind

If you're employed you can refuse a benefit in kind. In addition to not receiving the benefit from your employer, you must disclaim your right to it in a written statement to the taxes office stating which benefit(s) have been refused and the year of assessment that this relates to.

If your employer offers an alternative to the benefit in kind this will be subject to tax.