The Government intends to relax the rules on the taxation of Benefits-in-Kinds for employees, it has been revealed.
The new rules are due to come into force from 6 April 2016 after the next Finance Act.
Under the new rules low value Benefit in Kind amounts will be exempt from income tax and national insurance contributions up to limit of £50 per individual.
At the moment HMRC can choose to use discretion when deciding which BiKs should be subject to tax. Those benefits that are considered trivial are exempt from any taxation. Work Christmas parties, for example.
The Government predicts that the softening of the rules will relinquish £5 million in taxes during 2016/17, and an annual amount of £10 million afterwards.
The alteration is predicted to cut administration costs for both the Government and employers.
Do you provide your employees with Benefits in Kind that you currently process through a P11D form to HMRC? Hopefully this new rule will save you time and money 🙂
Have a great weekend