Some employee benefits are exempt from tax and not considered benefits in kind. The most common include company mobile phones, pension contributions and ‘trivial’ benefits valued at less than £50.
While many employer benefits are taxable based on their cash value, HMRC have identified a list of exemptions and concessions on certain things.
- Mobile phones/smart phones – An exemption is available up to one phone for each employee.
- Trivial benefits – This generally covers any benefit that costs less than £50, as long as it’s not in the form of cash or a cash voucher and is not given in recognition of work done by you. If you are a director, there’s an annual cap of £300 on trivial benefits.
- Employers pension contributions – Any contributions your employer makes to your pension are not taxable, as long as you don’t go above your annual allowance or your lifetime allowance.
- Medical treatment abroad – If you fall ill overseas whilst performing your duties, any medical treatment paid by your employer is exempt.
- Health screening and medical check-ups – Your employer can provide one health screening assessment and one medical check-up in any year tax-free.
- Incidental overnight expenses – These are HMRC agreed payments that your employer may reimburse, if your work requires you to stay away from home overnight. The amount is set at £5 per night if working away in the UK and £10 per night if working overseas and covers things such as newspapers, laundry and phoning home.
These are some other exemptions, although all are subject to certain conditions:
- Long service awards
- Suggestion schemes
- Car, motorcycle and bicycle parking
- Electricity provided for electric company cars and vans
- Christmas or other annual party
- Sports facilities
- Counselling
- Welfare counselling
- Bicycles and cycling safety equipment
- Removal expenses
- Goods provided at a discount
- Mileage allowances
- Home working allowance
- Work to home travel provided when you work late or when sharing arrangements are disrupted