Benefits from employment

As we introduced in last week's blog (which you can read HERE), there are certain rules that apply to certain benefits/benefits-in-kind that may reduce the tax liability. Some benefits that an employee can receive that are not subject to tax or can be received tax efficiently, include the following (conditions/restrictions can apply to these exemptions), travel passes, bicycle and safety equipment, canteen facilities, mobile phones, computer equipment, cars, vans, etc.   This week, we take a look at 3 types of benefits in more detail:  

Benefit – Canteen Meals 

An employer can provide free or subsidised meals to employees in a staff canteen, if the benefit is available to all employees, it is not a taxable benefit-in-kind.  It is important to note that; 

• The benefit must be available to all employees, if it is only available to certain employees it is a taxable benefit. 
• The meals must be provided in a staff canteen (external third-party restaurants, cafes or similar establishments are not included)

If the benefit is taxable it is calculated by

• Dividing the costs of the canteen between the employees who are allowed to use it
• Excluding the employees who are allowed to use the canteen but do not wish to do so

 

Benefit – Vouchers 

An employer can provide vouchers to employees, but this is a taxable Benefit-in-kind (unless it meets the criteria for the Small Benefit Exemption).  It is important to note that; 

• A voucher is a token that can be exchanged for goods or services. 
• The market value is the amount of money / value of goods received when used 
• The value of the benefit cannot be less than the cost of providing it 
• The value of the benefit of a meal voucher is the face value minus 19c 

Benefit – Sports and Recreational Facilities  

An employer can provide sports and recreational facilities to employees at work premises, if the benefit is available to all employees, it is not a taxable benefit-in-kind.  It is important to note that; 

• The benefit must be available to all employees, if it is only available to certain employees it is a taxable benefit. 
• Must be at the work premises

If the benefit is taxable it is calculated by:

• Dividing the cost of the facility between the employees who are allowed to use it
• Excluding the employees who are allowed to use the facility but do not wish to do so 

N.B. If an employer pays for a corporate subscription to sports or recreational facilities this is a taxable Benefit-in-kind