Benefits in kind are received by a great number of employees and directors, particularly those with company cars. The income tax implications of these benefits can be complicated and so taxpayers need to understand the rules so that they can properly prepare their self assessment tax returns and make decisions about their future remuneration package.
Helpfully, HM Revenue & Customs do provide guidance on the correct tax treatment of various expenses and benefits: HMRC Website
Specific areas which we are typically asked to advise on include:
- Understanding the mechanics of the new company car tax rules,
- Minimising the tax on company cars,
- Receiving non taxable benefits in kind,
- PAYE coding implications of these benefits, including coding out underpayments,
- Preparing forms P11d and calculating the resultant Class 1a NIC liability.
Agreeing your benefits in kind with HM Revenue & Customs is principally achieved by completing the employment supplementary pages of a normal tax return. Clients who are fearful that these benefits may be investigated by HM Revenue & Customs may wish to consider taking out our fee protection insurance.
Understanding this complicated tax system and paying the correct amount of tax, at the correct time, through the correct mechanism, is what most clients seek. Speak to our tax technicians and put your mind at ease. We may even be able to suggest ways to restructure your remuneration package and save tax.