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  ‘Benefits in kind’ 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’ might 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 ‘benefits in kind’ a good option for a young business as it’s often several years before a business starts to make  money.

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

 

Let’s start a conversation 

    Subscribe me for updates and news from In Accountancy

    Related articles

    time to pay arrangement
    Limited Companies

    Time to Pay Arrangements: A Lifeline for Owner-Managed Businesses

    Are You Struggling to Meet Your Tax Obligations?

    More than 30,000 UK businesses were involved in some kind of insolvency action in 2023, which was an increase of more than 50% compared with 2021 according to an article in the Guardian earlier this year.

    And the economic outlook would suggest that despite the fact that we are no longer in recession, 2024 and 2025 will be a challenging year for UK small business.

    With this in mind we have prepared the following guide and associated video to help you understand what your options are with regards to agreeing what is known as a ‘Time to Pay’ arrangement with HMRC.

    Read More »

    Find out how we can help?

    Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.

     

    Let’s start a conversation 

      Subscribe me for updates and news from In Accountancy

      IN-ACCOUNTANCY

      Search