M.P's expenses and 'perks' have been much in the news, causing outrage and amusement. Benefits in kind, however, feature in many employees' remuneration packages. From cars, fuel and mileage allowance to stocks and shares, medical insurance and childcare, there is an enormous range of employee benefits. Some are taxable, either at source or through the employee's own tax return. The taxable value will vary. Some benefits are partially or wholly tax-free. The rules are complex, and those responsible for payroll services need to be well-informed about legislative updates.
Most benefits in kind are subject to Class 1A National Insurance Contributions by the employer. Tax applies to things like cars and fuel (with reductions if the employee contributes), mileage allowance, passenger payments, vouchers, credit tokens, stocks and shares, medical insurance, parties and employee entertaining (if over £150 per head per annum) and accommodation if it is not strictly job-related. Payroll solutions are likely to be sought-after in this complex area of employee benefits.
Non-taxable benefits include employer's contribution to retirement funds, staff canteen meals and refreshments, car parking, mobile phone or vouchers, workplace nursery or creche places, in-house sports or gym facilities, re-imbursement of working at home expenses, relocation costs, and loans under £5000.
It is clear that administering wages for staff with these kinds of benefits is highly complex and time-consuming. Many businesses find it more efficient and cost-effective to use payroll outsourcing services, such as ours at Dataplan Payroll. Expert employees keep abreast of legislative changes to ensure your payroll is correct, no matter how complex it may be at our payroll processing services organisation.