Tax Help MD can teach you all the major tax terms and concepts you need. Visit our FAQ page for other questions, and contact us if you need expert support with a tax problem. Use our tax services to protect yourself from fraud and other problems. Benefits Received Principle Definition. What Is a Federal Tax Lien? What Is a Dependent Exemption? What Is an Injured Spouse Claim? What Is Property Tax? Who Needs to File a Tax Return? The benefit of travel between home and work in a bus or minibus that your employer provides may be non-taxable.
The following conditions must be met:. Or if your employer pays a subsidy to a public bus service so that you travel at a reduced or no cost on that route, provided that the service is available to all employees. Recognising the difficulty of bringing employees together safely in the midst of the coronavirus pandemic, HMRC have confirmed that the exemption will apply to the costs associated with virtual parties in the same way that it would for traditionally held parties.
The exemption applies to sports facilities generally available to all employees and members of their families and households. Certain elements of travelling and subsistence allowances paid under Working Rule Agreements to some employees in the construction and allied industries are paid free of tax under an agreement with HMRC. Any allowances or part of allowances covered by this agreement will not be shown on form P11D and should not be included on your tax return.
Most counselling services provided in connection with termination of employment are exempt from tax. There are detailed conditions to be satisfied. Welfare counselling made available to all employees generally on similar terms is exempt from tax. For this purpose, welfare counselling does not include:. There is no charge to tax on one mobile phone provided to you, or any line rental or the cost of any private calls for that phone paid for by your employer. One mobile phone may consist of two connections, for example, two SIM cards, to the same number, one in a handset and another in a hands-free phone in a car.
However, two connections to two different numbers represent two mobile phones. A mobile phone provided to a member of your family or household is taxable in all circumstances, unless the family or household member is provided with the phone as an employee in their own right.
If an employer provides a mobile phone to you solely for business use, and private use is not significant, there is no charge to tax. Consequently, it is possible for an employer to provide two, or more, mobile phones without creating a tax charge, if one or more is provided solely for business use — and private use is not significant — and only one is provided for private use. But if two mobile phones are provided for private use, or for mixed private and business use, only one is exempt.
It is up to you and your employer to decide which one is exempt and which one is chargeable as a benefit. HMRC accept that the provision of one such device to an employee can be exempt from a benefit in kind charge even where there is private use.
This exemption does not extend to other devices such as iPads, PDAs and tablets. If your employer lends or hires bicycles or cycling safety equipment to their employees, the exemption applies if:. The bicycles or equipment are available to all employees — this does not mean that every employee has to be provided with a bicycle or equipment, just that the offer of cycles or equipment is open to all employees if they wish to take it up; and.
Other use of the cycle, for instance pleasure use or use by members of your family will not disqualify the exemption provided that the other use is not the main use of the bicycle.
You are not expected to keep detailed records of time spent cycling or miles travelled for the purpose of this exemption. If ownership of the bicycle is transferred to you after a period of use during which the exemption applied, the transfer is a taxable benefit and the cost of that benefit is the market value of the bicycle at the date of transfer. The exemption from tax and NIC for loaned or hired cycles only applies where there is no transfer of the property in the cycle or equipment in question.
This means that the exemption ceases to apply if ownership is transferred to you. Similarly, the exemption does not apply if any agreement builds in from the outset an automatic transfer of ownership to you at the end of the hire period.
Some employees are paid an allowance for using their own bicycle for business travel. Their employer might pay them per mile to do so, for example your employer might pay you 10p for every business mile that you cycle.
You can receive up to a maximum amount per mile without having to pay any tax. The AMAP rate for using your own bicycle is 20p for each business mile. If your employer pays you 30p per mile, say, you have to pay tax and NIC on the extra 10p a mile you get above the approved rate.
If you get paid less than the approved rate then you can claim tax relief on the difference, assuming that your income is high enough that you pay tax. There is more information on claiming this on our What if I use my own car for business purposes? If your employer sells you goods, for example, unsold bakery products, at a discount, provided the amount you pay is at least the cost incurred by your employer in making the goods, there is no taxable benefit.
See our page What if I use my own car for business purposes? If you work from home, your employer can pay you a home working allowance to reimburse you for additional household expenses, such as gas and electricity.
There is more information on our page What if I incur expenses in relation to my job? Although this is aimed at employers, it will also be useful to employees. There is a quick guide to employment benefits aimed at employees on GOV.
Skip to main content. Home Tax Guides Employment Employment benefits and expenses What payments and benefits are non-taxable? What payments and benefits are non-taxable? Updated on 30 July Benefits and expenses may be tax free for a number of reasons: a PAYE settlement agreement PSA is in place — under a PSA, your employer settles, on your behalf, your income tax and NIC due to HMRC on certain types of benefits and expenses payments; or Statutory exemptions and Extra-Statutory Concessions — the benefits or expenses payments are covered by a concession or exemption.
You do not have to pay tax or NIC on benefits and expenses covered by a PSA , and if you complete a tax return, you do not need to include them there. What are the most common exemptions and concessions in relation to benefits provided by your employer? Qualifying business expenses Since 6 April , there is an exemption for qualifying business expenses paid or reimbursed by employers. Employer contributions into a pension Employer contributions to an employee's pension scheme are not taxable on the employee provided they are within certain limits.
Medical treatment abroad The cost of necessary medical treatment abroad paid for by your employer, or paid by you and reimbursed to you by your employer, where you fall ill or suffer injury while away from the United Kingdom in the performance of your duties.
Health screening and medical check-ups Expenses incurred in providing you with a maximum of one health screening assessment and one medical check-up in any year. Certain living accommodation The cost of living accommodation, also known as job-related accommodation, provided for you if: it is necessary for the proper performance of your duties that you reside in the accommodation, but see note a below; or the accommodation is provided so that you can perform your duties in a materially better way and you are in the kind of employment in which it is customary for employers in that business to provide accommodation, but see note a below; or there is a threat to your security and special security arrangements are in force and you reside in the accommodation as part of those arrangements.
Note: a If you are a company director and the company, or an associated company, provides you with accommodation, you can only seek exemption in these circumstances if: you have no material interest in the company; and either you are a full-time working director; or the company is non-profit making; or is a charity. Incidental overnight expenses These are payments that your employer might make for personal expenditure, up to certain limits, when you stay away from home for at least one night during a business journey, for example, buying newspapers, laundry, phoning home.
If the maximum for a business journey as a whole is exceeded, the full amount paid for that journey is taxable. Travelling and subsistence expenses following strike disruption Reasonable expenses reimbursed to you, or paid on your behalf, if, because of dislocation of public transport by strikes or other industrial action, you: stay overnight in hotel or other accommodation; or incur extra costs in travelling to and from work.
Certain retraining costs Costs met by your employer, if you are about to leave your employment, or have left within the previous year, to enable you to attend certain courses of retraining intended to help you get another job. Courses must: teach or improve skills which will help you to find new work, and be entirely devoted to those objectives; and last no more than two years. The opportunity to attend courses must have been given to all employees in a similar position.
Exempt expenses are: fees for the course; fees for examinations taken during or at the end of the course; the cost of essential books; and the full cost of travelling to attend the course, plus related subsistence expenses. Employer-funded or employer-reimbursed training This exemption covers the costs borne by your employer of work-related training within the whole range of practical or theoretical skills and competencies you are reasonably likely to need in your present or likely future jobs with your employer.
The exemption extends to: training activities such as first aid and health and safety in the workplace; employee development schemes; activities intended to develop skills you need in leadership; and any training that is provided by a third party rather than your employer. The tax exemption also covers: travel and subsistence expenses, to the same extent as if you were undertaking employment duties while training; other incidental costs, such as additional childcare expenses directly related to you undertaking the training in question; costs that relate to examinations and registration of qualifications; and costs of multimedia and distance learning aids, practical course materials and books.
Long service awards Long service awards made to directors and employees as testimonials to mark long service where the service is not less than 20 years and no similar award has been made to the same employee within the previous 10 years. These have to be: things or articles, rather than cash; or shares in an employing company or another company in the same group. The test is that, taking account of your experience, you could not reasonably have been expected to put forward such a suggestion as part of the duties of your post; and the suggestion was not made at a meeting held for the purpose of proposing suggestions.
The exemption applies to two types of awards for suggestions: a Encouragement awards An encouragement award is one that is made for a suggestion that has some special merit or reflects praiseworthy effort on the part of the person making the suggestion. What is a Wealth Tax? Understanding Progressive, Regressive, and Flat Taxes. Estimate your tax refund and where you stand Get started. See if you qualify for a third stimulus check and how much you can expect Get started.
Easily calculate your tax rate to make smart financial decisions Get started. Estimate your self-employment tax and eliminate any surprises Get started. Know what dependents credits and deductions you can claim Get started. Know what tax documents you'll need upfront Get started. Learn what education credits and deductions you qualify for and claim them on your tax return Get started. The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice.
Skip To Main Content. What Are Tax Benefits? Introduction The term "tax benefit" generally refers to any tax law that provides you with an opportunity to reduce your tax bill when you satisfy certain eligibility requirements. Saving tax with deductions The most common type of tax benefit comes in the form of a tax deduction.
Excluding income from income tax An exclusion from tax provides the ultimate tax benefit because the income never ends up on your tax return, and if it does, it generally comes off in another section of your return. Claiming tax credits A tax credit generally has more tax-savings potential than a deduction as it provides a dollar-for-dollar reduction in the amount of income tax you owe rather than merely reducing the amount of income subject to tax.
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