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Benefits in kind

Benefits in kind which are exempt from tax and national insurance can be a more tax efficient way of taking remuneration from your company than dividends.

Stockport accountants, IN Accountancy, state that ย โ€˜Benefits in kindโ€™ are an alternative to cash so they should really replace a cost that you would incur personally out of your taxed income but which the company could pay for. The main ones that are exempt from income tax and NI are:

  • Contributions to a registered pension scheme
  • Zero emission cars or vans
  • Training paid for by your company
  • Childcare facilities
  • Childcare vouchers (limited exemption)
  • Free/subsidised meals in the workplace.
whiteboard with numbers on it
Training paid for by your company is a benefit in kind

The financial advantage of claiming ‘benefits in kind’ mightย not be that great but can be worthwhile.

A further advantage is that they can be provided by your company even when it has no profits.

 

This can make tax and NI-free โ€˜benefits in kindโ€™ a good option for a young business as itโ€™s often several years before a business starts to make ย money.

For expert help with working out the best option between claiming dividends and โ€˜benefits in kindโ€™ for your particular business situation, please contact sarah@in-accountancy.co.uk or ring 0161 456 9666.

 

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