Expenses and benefits in kind:
a guide to tax and NICs: how to operate the rules
What you need to do
If you give or provide anything, other than pay, to your employees, including directors, you must:
- check whether it is taxable or liable for NICs as expenses or benefits
- keep records of all expenses and benefits, whether or not they are taxable or liable for NICs
- provide details to your employees of the amount of expenses and benefits paid.
You may also be responsible for NICs on expenses or benefits your employees receive from a third party.
If you think that something might be taxable or liable for NICs and:
- it is not covered by a dispensation or
- a PAYE settlement agreement
first check the quick guide to whether tax and NICs are due. This is an A-Z list of different expenses and benefits and will tell you whether:
- tax is collected through Pay As You Earn (PAYE)
- it goes on form P11D or P9D. At this link you will also find information about e-filing
- it is liable for either Class 1 NICs or Class 1A NICs.
Then click the back button to return to this page if you need help to know what to do next.
If you do not need to take an expense payment or benefit into account, there is nothing further for you to do.
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