|“We have been extremely pleased with the service you have given us over the years and consider it to have been excellent value for money.”
Mrs C A – Whitchurch
|Benefits in kind|
Benefits in kind are sometimes provided by the employer in addition to the employee's salary. They are often taxable benefits and must be reported annually as part of employee's gross earnings.
Who pays the tax?
Tax on benefits in kind is payable in arrears and is not reported until July following the end of the tax year. Sometimes it can take up to two years before payments are claimed by HMRC, and during the interim your employee can have moved from one job to another, leaving the new employer responsible for paying what can in some cases be a very large sum of money. If your employee is on a gross wage, however, then the tax is deduced from their gross income at their current rate of tax.
In addition to tax there may also be a Class 1A NI charge of 12.8% of the value of the benefit to be paid - the employer always pays this charge.
Examples of taxable benefits
NB: PLEASE NOTE THAT THIS LIST IS NOT EXHAUSTIVE.
Mobile phones are not considered a taxable benefit
Use of Car
Please note that the information and examples contained on this page are to be used as guidelines only. If you have specific questions please contact Stafftax.
|Stafftax for domestic employers|
When you employ domestic staff in the UK you not only have to find the best possible candidate for your household, you also become an employer. As such you take on a host of responsibilities. For instance, you must draw up an employment contract with your employee within eight weeks of their start date and give them a payslip every time they get paid. It is also a legal responsibility that you have employer’s liability insurance.
In addition you must also make sure that you pay your employee at least the national minimum wage or above, so you need to have a good understanding of the basics of employment law. It's surprisingly easy to make mistakes when you're juggling issues such as holiday entitlement, statutory sick pay, benefits in kind, statutory maternity pay and redundancy pay. At Stafftax we can take care of the payroll aspects for you so you can concentrate on the your family, your household and the more important things in life.
|A step-by-step guide to make sure your employee can work in the UK|
When you consider employing someone you must carry out basic document checks to ensure the person is entitled to work in the UK. Nannytax has put together a guide to help you with this process.