HM Revenue & Customs (HMRC) has reminded employers that the rules surrounding benefits in kind agreed before 06 April 2017 are changing.<\/p>\n
A benefit in kind is a benefit received by employees or directors in exchange for a portion of their salary. Before 06 April 2017, many benefits in kind were tax-free, meaning workers paid less tax than those receiving cash-only salary packages.<\/p>\n
However, new rules introduced on 06 April 2017 meant almost all benefits in kind were now taxable, with some leeway given to benefit in kind packages entered into pre-April 2017.<\/p>\n
Commenting on the new guidance, published in the latest payroll bulletin, HMRC said: \u201cArrangements entered into on or before 5 April 2017 kept their previous tax treatment until the earlier of a renewal or variation of the arrangement. Most pre-6 April 2017 BiKs moved into the new rules on 6 April 2018.<\/p>\n
\u201cPre 6-April 2017 cars and accommodation move into the new rules on the earlier of renewal or variation or April 2021. Pre-6 April 2017 school fees have special rules, but all move into the new rules from April 2021.\u201d<\/p>\n
Likewise, employees who entered into an arrangement for cars, accommodation or school fees before April 2017, \u201cneed to review these contracts before April 2021\u201d.<\/p>\n
Taxable benefits in kind are \u201cvalued at the higher of the cash given up or the value under traditional rules\u201d. Additionally, all previously non-taxable benefits in kind are now taxable, valued on the cash given up.<\/p>\n
As usual, exempt benefits in kind \u2013 such as cars with emissions of 75g CO2 \/km or less, pensions, pension advice, childcare and Cycle to Work – are not affected by the legislation.<\/p>\n
If you need payroll support, get in touch with our expert team today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" HM Revenue & Customs (HMRC) has reminded employers that the rules surrounding benefits in kind agreed before 06 April 2017 are changing.<\/p>\n","protected":false},"author":2,"featured_media":3478,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30,31,46,28],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3476"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=3476"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3476\/revisions"}],"predecessor-version":[{"id":3477,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/3476\/revisions\/3477"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/3478"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=3476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=3476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=3476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}