A benefit in kind (BiK) is something your employer provides to you on top of your salary that has a monetary value. Common examples include a company car, private medical insurance, a gym membership paid by your employer, or accommodation. These benefits are not paid in cash, but they still have a taxable value. HMRC considers them part of your overall remuneration package, so they are subject to Income Tax and National Insurance. As an employee, you pay Income Tax on the value of the benefit, and your employer pays Class 1A National Insurance on it. Your employer reports these on a P11D form submitted to HMRC every year.
MicroEntityAccounts.com connects small businesses and individuals with registered UK accounting firms – we don’t prepare or file accounts ourselves. We are not affiliated with any similarly named company or website.