Business, Legal & Accounting Glossary
These are benefits, excluding salaries, given to employees which include cars and car fuel, medical insurance and gifts etc. and which are taxed as employment income.
A benefit in kind is ‘consideration’ that may be offered by an employer to an employee in lieu of cash. Typically it can be a company car, private medical insurance plan or a cheap loan to assist in paying for travel season tickets.
Until the 1999 Budget, employers only had to worry about paying National Insurance Contributions (NICs) on company cars. Thereafter, private medical insurance and cheap loans were included with the tax and NIC systems being brought into line by the Government.
However, employees are still exempted from paying any NICs on benefits in kind.
Although this has meant the cost of providing benefits in kind to employees has risen, many employers have continued to offer them and even increase the quality of what they offer as a result of the competitive labour market and the need to retain trained and experienced staff.
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This glossary post was last updated: 26th April, 2020 | 0 Views.