Income tax: statutory exemption for trivial benefits-in-kind
From 6 April 2015 any employer who provides to their employees certain low value benefits-in-kind (BiKs) will, in some circumstances, become exempt from income tax. The exemption provides a number of conditions that must be met for a BiK to qualify as trivial, including an upper limit per individual BiK of £50.
Individuals who currently pay income tax on certain low value BIKs provided by their employer, will become exempt from income tax.
The measure is intended to provide a simplification to the current approach for dealing with low value BiKs, whereby employers are required to agree with HMRC whether certain BiKs can be treated as trivial.
A statutory definition of a trivial BiK will provide certainty to employers as to the treatment of such BiKs, and therefore allow employers to identify them in ‘real-time’, avoiding the need to contact HMRC or report such BiKs on P11D or PAYE Settlement Agreement (PSA) forms after the end of the tax year.