Benefits in kind can be thought of as perks enjoyed personally, using company funds. Due to the fact that these perks effectively increase your personal income and are not taxed as part of a regular salary, each of these expenses may incur National Insurance Contributions at 13.8%
These types of benefits are reported each year to HMRC via a P11D form which simply highlights certain expenses, either paid by the company back to the employee or expenses enjoyed by the employee, during the tax year.
National Insurance Contributions owed should be paid to HMRC by the company, not an individual employee.
Common benefits include:
- A company car
- Private health insurance
- Personal tax return fees paid for by the company
- Interest free loans from the company to an employee - think an overdrawn Director's Loan Account (DLA)
E.G - Company Director purchases Self Assessment for £90, the NICs owed would be taxed @ 13.8% which is £12.42 which would only be paid via the P11D(b)