Understanding how the benefits you receive from your employer are taxed can be confusing.
Your employer will calculate the tax owed and take this from your salary by decreasing your tax code -reducing your tax free allowance.They will issue you with a P11D which should be kept for at least 2 years.Although the employer will be dealing with the tax due it may be helpful to know what the main taxable benefits are and how the rules apply.
The most common benefit effecting employees would be the use of company cars for private use and commuting.
The amount of tax due depends on a variety of factors including the type of car, cost, emissions, fuel type and whether any contribution was made towards the purchase of the car by the employee. The HMRC site has an estimator tool which can be useful -www.-gov.uk/tax-company-benefits/taxoncompany-cars
Loans from an employer over £10,000 which are interest free are taxable . The rate of tax will be payable on the difference between the Bank of England rate and the employer rate charged.
Living accommodation over £75,000 in value provided is taxable if it is not necessary for the job eg a pub manager.
Medical Insurance premiums are taxable as a benefit.
National Insurance due on taxable benefits is paid only by the employer
There is some good news though some benefits can be received tax free including
Meals in a staff canteen
Mobile phones
Workplace parking
Childcare vouchers in a workplace nursery.
And finally if you have been receiving a benefit in kind with one employer and then moved employment and no longer receive it, its best to check your tax code is correct as HMRC won’t know about the change and may still be penalising you for a benefit you no longer receive.