What a benefits in kind is
Benefits in kind are anything you (or a member of your household) receive, which is not money, from your employer. They are also sometimes known as employee or employment benefits.
These are normally provided either free or below the normal cost (eg free accommodation or discounted shares).
Some benefits in kind are exempt from tax. Any allowances, cash payments or reimbursement of out of pocket expenses are not benefits in kind, but part of your salary.
Exemptions from benefits in kind
Employment income and tax
How benefits in kind are taxed
Benefits in kind are taxable. Your employer will calculate the value of your benefits so that you can declare the amount on your personal tax return.
Your employer will also report the full amount of benefits to us.
You are taxed on the total of all your benefits in kind from all your employers in the year, less the benefit in kind deduction that applies for that year of assessment.
As no tax (ITIS) is deducted from employment benefits when you receive them you may find that you need to make a balancing payment at the end of the year to cover the tax due, especially if the value of the benefit(s) you receive is substantial.
Allowances, reliefs and deductions for income tax
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.