The Government is set to implement a statutory tax exemption from income tax and National Insurance Contributions for low-value benefits in kind (BIK). As part of the Finance Bill 2016, it will be set at a £50 limit from 6 April this year.
Furthermore, qualifying ‘trivial’ BIKs that are given to directors or other office holders of close companies – or to members of their families or households – will be subject to an annual cap of £300. Employers will no longer need to report trivial benefits on either form P11D or via Pay As You Earn Settlement Agreements (PSAs) at the year end.
The 2007 Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) Regulations will be changed to apply the exemption to former employees and the annual cap to trivial benefits in kind provided to former directors and office holders and members of their families and households.