Benefits in kind and P11D

Non-cash benefits given to employees, and how they are taxed.

What it means

A benefit in kind is something of value given to an employee other than salary — a company car, private medical insurance, an interest-free loan above a threshold.

Why it matters

Most are taxable on the employee and carry Class 1A National Insurance for the employer, reported on a P11D or payrolled in real time.

What it looks like in practice

Payrolling benefits is becoming the default and removes the P11D for those benefits. Some benefits are exempt — certain trivial benefits, workplace parking, mobile phones within limits.\n\nElectric company cars carry a very low benefit charge, which is why they are used in salary sacrifice.

What to watch out for

Business expenses paid personally and reimbursed, which can be exempt if properly evidenced and taxable if not. Record keeping decides it.

Where to get proper advice

GOV.UK for the current rates and thresholds, which move most years. Your accountant before acting — this is exactly the kind of question a fee is for.