Section 13 – Lucky for some!

Whilst we are in the season for P11D completion, reporting the employer provided benefits and expenses not put through payroll, we thought it might be timely to recall some benefits you don’t need to include on the form.

Contained within Section 13 of the Finance Act 2016 is legislation exempting from tax certain Benefits in Kind provided to employees from 6 April 2016.

No liability to income tax arises in respect of a benefit provided by, or on behalf of, an employee or a member of the employee’s family or household if the following conditions are met.

  • Condition A – the benefit is not cash or a cash voucher.
    • Condition B – the benefit cost (either the cost of providing the benefit, or the average cost where provided to multiple recipients and it is impractical to calculate the individual cost) does not exceed £50.
    • Condition C – the benefit is not provided pursuant to relevant salary sacrifice arrangements or any other contractual obligation.
    • Condition D – the benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services.

The following condition applies where the employer is a close company and the employee is a director or officeholder of the company or a member of the family or household of such a person.

  • Condition E – the benefit cost does not exceed the recipient’s available exempt amount, the annual amount being £300, and the available exempt amount is the amount so far unused.

We consider these exemptions to be very useful particularly now with the more common practice for example, of the employer paying for an employee’s flu jab. Without the above the pain of the flu jab would be doubled as it would also become a taxable benefit!

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