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.
Calculating benefits in kind
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
If you need help filling out the benefit in kind section of your tax return watch our help video.
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.