Which benefits in kind are taxable?

Under general taxation law, some but not all benefits provided by your employer are taxable. Benefits provided by your employer are given a value according to HM Revenue and Customs rules, so the tax payable on the benefit may be less than its full value to you as the employee.

The GOV.UK web site provides an A-Z list of each type of benefit and what might have to be paid. Common examples of benefits provided by an employer which are taxable include:

  • company cars provided for private use;
  • fuel for private motoring;
  • living or other accommodation;
  • certain employee expenses paid direct by the employer, e.g. restaurant bills;
  • loans, including credit provided by the company; and
  • private health insurance.

Certain benefits are exempt from taxation, as long as they are available to all employees. These include:

  • meals in staff canteens (if the canteen is available to all employees);
  • meal vouchers that cover the cost of buying meals in a workplace canteen;
  • Long Service awards (for service of 20 years or more, when an award hasn't been given to the employee in the last 10 years) where the gift does not exceed £50 for each year of service and which is a tangible gift, such as a clock or shares in a company. (A cash award is usually taxable unless it is a one-off payment which is not in the contract of employment.);
  • parking spaces at or near the employee's work;
  • some travel between work and home, e.g. late night travel (but on an occasional basis) or a works bus service;
  • sports facilities available for use by all employees; and
  • an employee is provided with one mobile phone or SIM card (and the phone contract is between the employer and the supplier).

The list is not exhaustive. Visit the Low Incomes Tax Reform Group website for more information on benefits in kind.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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