Q: What are Benefits in Kind?

A:Benefits in kind” are benefits that employees or directors receive from their company which are NOT included in their salary or wages.

Q: Why Benefit in Kind taxable?

A: A taxable benefit can be in the form of cash, near cash or payments for the services that primarily benefit the employee. If there is a contractual obligation or a legitimate expectation that the employee might receive some financial benefit due to the employment. This becomes taxable.

Q: How does Perkbox fall into that?

A: If employers pay for an ‘app/website’ which enables employees to access discounted products or services which the employee then pays for, the benefit provided by the employer is not the actual product or service supplied by the digital platform. For example, the redemption of John Lewis vouchers or free coffee. The benefit is the cost to access the ‘app/website’ itself. i.e Perkbox subscription cost. Source: HMRC Employers Bulletin

Q: Is the Perkbox reward and recognition product taxable?

A: No, as this has no monetary value to the employees.

But if Company sends some reward using the platform which has a monetary value, the cost of that award is taxable. For example, Company rewards £500 amazon vouchers to the employee for outstanding performance.

Q: Is the Perkbox wallet product taxable?

A: No, as this has no monetary value to the employees.

But if Company tops up the employee's wallet for employment related performance, the cost of that wallet top up is taxable. For example, Company tops up £300 to employees wallet for outstanding performance.

Q: We have a lot of customers request to reduce the price below £50 annual tax free allowance, is it applicable to Perkbox?

A: This is not applicable to Perkbox, Perks products are taxable, even if it costs £1.

There is a contractual obligation or a legitimate expectation to receive perks benefits as part of employment.

Q: Should companies include perkbox subscription fees on P11d's?

A: Yes, they can but it is common to declare this type of benefit on PSA (PAYE settlement agreement) rather than P11D. On PSA returns employers pay all the taxes.

Q: How do I calculate the cost of a Perkbox to add to P11d's?

A: Cost of Perkbox doesn't need to be on P11D. This could go on PSA. Please see the HMRC guidance on how to submit PSA.

Q: Can we artificially pump up the price of recognition and reduce the price of Perks to reduce the tax liability?

A: No, the cost of the different products would need to be established on a ‘just and reasonable’ basis. In practice, you could work out how much the different elements cost the employer and apply a percentage to each. HMRC would not accept a nominal portion and would expect you to do some sort of analysis to justify costs.

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