This guide explains your tax and National Insurance contributions (NICs) obligations if an employee makes a purchase using a credit, debit or charge card in your business’s name.
The rules in this area are complex. To go direct to more detailed information choose the link below to ‘Technical guidance’.
On this page:
Your employee uses a card you’ve provided to make a business purchase. They have your prior authority for the purchase and when making the purchase they make it clear that they are acting on behalf of your business.
For a purchase to be clearly on your business’s behalf, both the following must apply:
Unless one of the exceptions referred to below applies, you have:
Follow the link below for a list of credit card purchases for which different rules apply. Many of these – such as fuel for a company car, parking spaces and incidental overnight expenses – are covered by separate entries in this A to Z.
EIM16100: Exclusions from the scope of the ‘credit token’ legislation
Without your prior authority, an employee uses a card you’ve provided to make a business purchase. Their purchase is clearly made on behalf of your business.
For a purchase to be clearly on your business’s behalf, both the following must apply:
For employees earning less than a rate of £8,500 per year, unless one of the exceptions referred to below applies:
For company directors or employees earning at a rate of £8,500 or more per year, unless one of the exceptions referred to below applies:
The value to use is the amount of the employee’s purchase.
Follow the link below for a list of credit card purchases for which different rules apply. Many of these – such as fuel for a company car, parking spaces and incidental overnight expenses – are covered by separate entries in this A to Z.
EIM16100: Exclusions from the scope of the ‘credit token’ legislation
Your employee uses a card you’ve provided to make a business purchase. They don’t make it clear that the purchase is on your behalf – this means that either:
For employees earning less than a rate of £8,500 per year, unless one of the exceptions referred to below applies:
For company directors or employees earning at a rate of £8,500 or more per year, unless one of the exceptions referred to below applies:
How a dispensation can reduce your expenses and benefits reporting
The value to use is the amount of the employee’s purchase.
Follow the link below for a list of credit card purchases for which different rules apply. Many of these – such as fuel for a company car, parking spaces and incidental overnight expenses – are covered by separate entries in this A to Z.
EIM16100: Exclusions from the scope of the ‘credit token’ legislation
Your employee uses a card you’ve provided to make a private purchase. They don’t make it clear that the purchase is on your behalf – this means that either:
For employees earning less than a rate of £8,500 per year, unless one of the exceptions referred to below applies:
For company directors or employees earning at a rate of £8,500 or more per year, unless one of the exceptions referred to below applies:
The value to use is the amount of the employee’s purchase.
Follow the link below for a list of credit card purchases for which different rules apply. Many of these – such as fuel for a company car, parking spaces and incidental overnight expenses – are covered by separate entries in this A to Z.
EIM16100: Exclusions from the scope of the ‘credit token’ legislation
It’s important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of £8,500. For more information – including details of what’s included in the £8,500 threshold - follow the link below.
NIM02090: Company credit cards
