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What are benefits in kind?

Where you have personal use of a company asset, or the company pays your private expenses, then the company can claim relief for corporation tax as if the asset or the expense were made purely for business purposes. You, personally, are charged to income tax for receiving a 'benefit in kind'.

There are some exceptions. These include:

payment for parking facilities near your place of work;
relocation expenses up to �8,000;
�2 per week towards the cost of working at home (in certain circumstances);
loan of a computer costing up to �2,500;
provision of mobile telephones.

The value of the benefit in kind depends on the circumstances. If the company pays your bills, it will be the cost of the bill. If you are loaned assets, the benefit is assessed at 20% of the cost of the asset. Cars are treated differently.

The annual benefit of a car is assessed as a percentage of its list price, where the percentage is between 15% and 35% depending on the carbon dioxide emissions of the car. A decision that needs to be made is whether to provide company cars for employees, and sometimes it is cheaper for employees to provide their own car and claim a mileage allowance. The cheapest route depends on several variables, such as the depreciation that the car will suffer. We can do the calculations for you, should you wish.

If the company pays for any private fuel, you will be charged an amount that again is based on the carbon dioxide emissions of the car. The cost can be expensive, and many people find that it exceeds the actual cost of the fuel and so they ensure that the company only pays for their business mileage.