A Benefit in Kind is a non-cash perk provided by an employer to an employee or director, such as a company car, private medical insurance, or subsidised living accommodation. Most benefits in kind are taxable and must be reported to HMRC.
Reporting benefits in kind
Employers usually report benefits in kind on a P11D form or payroll them through the payslip, and pay Class 1A National Insurance on their value. The employee pays Income Tax on the benefit, often through an adjustment to their tax code.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.