PAYE72035 - PAYE operation: payments for PAYE purposes: non-cash remuneration

Readily convertible assets

Section 696 ITEPA 2003 requires employers to operate PAYE where they remunerate employees in the form of a readily convertible asset. The amount that is treated as PAYE income for the purpose of operating PAYE is the best estimate that can reasonably be made of the amount of income likely to be PAYE income in respect of the provision of the asset.

Section 702 ITEPA 2003 defines the meaning of ‘readily convertible asset’ and EIM11900 onwards gives information on the different types of readily convertible asset.

Ordinary benefits

The treatment of ordinary benefits in kind (for example cars, private health insurance, employees private expenses met by the employer) remain outside the scope of PAYE deduction and must be reported to HMRC by the employer on form P9D/P11D.

National Insurance Contributions

Advice regarding National Insurance Contributions on non-cash remuneration should be sought from HMRC NICO. Enquiries from employers / agents should be referred to the NIC Employer Helpline: 0845 714 3143.