Employee Benefits

Company car expenses and benefits – what’s exempt?

While company cars often come with tax implications, there are specific situations where the associated benefits may be exempt. There are circumstances where it can be possible to offer employees car benefits that are exempt from tax.

Exempt

The scope of the trivial benefits legislation

The trivial benefits legislation provides a simple and practical tax exemption that allows employers to give small non-cash benefits to employees without triggering tax or National Insurance charges.

To qualify as a trivial benefit, the cost to the

Avoiding the car fuel benefit charge

Employees with company cars may be paying unnecessary tax on private fuel, when reimbursing the cost of private fuel in full can often remove the car fuel benefit charge altogether.

Where an employee is provided with a company car and fuel for

Taxable company benefits

As an employee, you pay tax on certain company benefits, such as cars, accommodation, and loans. Your employer calculates the tax you owe and deducts it through Pay As You Earn (PAYE). The amount of tax depends on the type and value of the

Tax and trivial benefits

There is a trivial benefit-in-kind (BiK) exemption that applies to small, non-cash gifts (such as a bottle of wine or a bouquet of flowers) that are occasionally given to employees.

This exemption enables employers to offer modest, tax-efficient

Taxable benefits for use of company car

The tax you pay on the use of a company car depends largely on its CO2 emissions, so choosing a lower emission or electric vehicle can make a significant difference to your overall tax cost.

The benefits in kind (BIK) tax on company cars can be

Using your own car for work purposes

Using your own car or bike for work travel? You may be able to claim tax relief for business mileage.

If you are employed and spend your own money on items needed for your job, you may be eligible to claim tax relief on those expenses. However, you

Claim for a business journey in a private vehicle

Use your own vehicle for work? You could be entitled to a tax-free mileage allowance. Make sure you are not missing out on HMRC-approved rates.

If you use your own car, van, motorcycle, or bicycle for business journeys, you may be entitled to a

Repay private fuel provided for company cars

Employees using company fuel for private journeys can sidestep a hefty benefit charge by repaying the full private fuel cost to their employer by 6 July 2025. Miss the deadline, and tax becomes unavoidable.

This repayment process is known as

Still time to repay private fuel costs and avoid tax charge

Use a company car for personal trips? Avoid a hefty tax charge by reimbursing your employer for private fuel by 6 July 2025. It’s called “making good” – and it could save you a chunk in tax if your private mileage is low.

To avoid the

Tax and employee suggestion schemes

Have you set up a suggestion scheme for ideas that could save or earn you money? Employee suggestion schemes can offer up to £5,000 tax-free for valuable input — and even £25 for smaller efforts. A win for innovation and your employee

Make the most of trivial benefit payments 2025-26

Small gifts can mean big tax savings! Use the trivial benefits exemption in 2025-26 to reward employees with non-cash perks under £50 – no PAYE, no P11D, and no NIC. A smart, simple way to say thanks.

The rules providing trivial benefit payments

What is a salary sacrifice?

A salary sacrifice scheme lets employees swap cash salary for non-cash benefits, saving tax and National Insurance. But earnings must not fall below the National Minimum Wage, and life events may impact eligibility. Learn how to navigate these

Check or update company car tax details

If you use a company car for private travel, it’s taxed as a Benefit in Kind (BIK). The tax rate depends on the car’s list price and CO2 emissions—low-emission vehicles get tax breaks. Use HMRC’s online tool to check and update your company car

Tax-exempt employee loans

Beneficial loans, where employees benefit from cheap or interest-free loans from their employer, can trigger tax implications. However, certain exemptions, like loans under £10,000 or qualifying loans, eliminate the need for employers to report or

Payrolling employee benefits

Employers can voluntarily register to report and account for tax on certain benefits and expenses via the RTI system before the start of the tax year. This process, known as payrolling, eliminates the need to submit P11D forms for the selected

Advising HMRC of employees’ company car details

Ensure compliance with HMRC rules when providing company cars. From P46(Car) submissions to benefit reporting, learn what steps to take for private use and specific exemptions.

Here are the steps you need to follow to inform HMRC if you make any

Using the car fuel rates

Advisory fuel rates for company cars help employers and employees manage fuel costs without triggering tax liabilities. Learn how to use these rates to avoid tax, especially car fuel benefit charges.

HMRC’s fuel rates also known as advisory fuel

Not so Trivial Tax Benefits

There is a trivial benefit-in-kind (BiK) exemption for small, non-cash employee benefits. This exemption applies to BiKs classified as ‘trivial,’ helping employers simplify the handling of these benefits while offering a tax-efficient way to give

Medical and dental care for employees

There is no requirement for employers to pay tax and National Insurance on certain health benefits covered by tax concessions or exemptions. For example, there is no requirement to report employees’ medical or dental treatment or insurance if they

Tips at work

Tips received at work do not count towards your earning for the purposes of the National Minimum Wage. However, you are still required to pay Income Tax on these tips and may also need to pay National Insurance.

The person who is responsible for

Late night taxi for an employee

There is no specific requirement for employers to provide employees with transport home. Nevertheless, an employer has a duty of care to their employees, which means that they should take all steps which are reasonably possible to ensure their

Tax and employee share schemes

There are a number of government approved share schemes which offer various incentives to employees. The rules of the schemes vary but they are all designed to help incentivise employees by giving them the opportunity to invest in their employer’s

Employee suggestion schemes

There are many advantages to creating an employee suggestion scheme where employees are rewarded for making suggestions that benefit your business. Apart from the value that these suggestions can have in saving money or driving new business ideas

Beneficial tax-exempt loans

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan

New tips guidance published

New rules that stop employers from withholding tips from people working in the hospitality, leisure and services sectors are a step closer following the publication of a new Code of Practice on tipping.

The Employment (Allocation of Tips) Act 2023

Bikes for employees

The Cycle to Work scheme allows employers to provide bicycles and cyclists’ safety equipment to employees as a tax-free benefit. The scheme must be offered to all employees and the bike must be used mainly for qualifying journeys i.e., between home

Payrolling employee expenses and benefits

Employers can register on a voluntary basis (before the start of the tax year) to report and account for tax on certain benefits and expenses via the RTI system. This is known as payrolling and removes the requirement to complete a P11D for the

Tax-free mileage expenses

If you use your own vehicle for business journeys you may be able to claim a tax-free allowance from your employer known as a Mileage Allowance Payment or MAP. The allowance is paid when employees use their own car, van, motorcycle or bike for work

Reporting company car changes

There is a requirement to notify HMRC if you make any company cars available for private use by company directors or employees. The definition of ‘Private use’ includes employees’ journeys between home and work unless they are travelling to a

Using your vehicle for work related journeys

If you use your car or other vehicle to undertake business journeys on behalf of your employer, and your employer does not:

Fully reimburse you for the business use, or
Reimburses you but at a lower rate per mile than the approved HMRC rates (see

Tax consequences of loans to employees

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan

Tax exempt accommodation costs

There are special rules for the provision of living accommodation for employees. In most cases, employees will pay tax on any living accommodation provided by an employer unless they qualify for an exception.

However, where an employee qualifies for

Reminder of not-so-trivial tax-free benefits

There is a benefit-in-kind (BiK) trivial exemption that applies to small non-cash benefits like a bottle of wine, or a bouquet of flowers given occasionally to employees or any other BiK classed as ‘trivial’ that falls within the exemption. By taking

Tax free annual party

The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax purposes. If you meet the various criteria outlined below, then there is no requirement to report anything to HMRC or pay tax and National Insurance.

Electric charging of company vehicles at home base

HMRC has published revised guidance concerning the charging of company cars and vans at residential properties. HMRC had previously maintained that the reimbursement of costs in relation to charging a company car or van at a residential property was

Tax on incentive rewards

Companies may use incentive award schemes to encourage their employees in various ways. For example, to sell more of their own goods and services. The award can be in forms including cash, vouchers or other gifts.

Where an employer meets the tax

Calculate tax on company cars

Where an employee with a company car is provided with fuel for their own private use by their employers, the default position is that the employee is required to pay the car fuel benefit charge. The charge is determined by reference to the CO2 rating

Tax on trivial benefits

There is a benefit-in-kind (BiK) trivial exemption that applies to small non-cash benefits like a bottle of wine, or a bouquet of flowers given occasionally to employees, or any other BiK classed as ‘trivial’ that falls within the exemption. By

On your bike tax-free

The Cycle to Work scheme was introduced over 20 years ago to help promote the use of environmentally friendly modes of transport.

The scheme allows employers to provide bicycles and cyclists’ safety equipment to employees as a tax-free benefit. The

Tax exempt private medical costs

There is no requirement for employers to pay tax and National Insurance on certain health benefits covered by tax concessions or exemptions. For example, there is no requirement to report employees’ medical or dental treatment or insurance if they

Filing deadline for share scheme operators

There are a number of government approved share schemes which offer tax advantages to employees. The approved schemes are Share Incentive Plans (SIPs), Save As You Earn (SAYE) schemes, Company Share Option Plans (CSOPs) and Enterprise Management

What is a P11D?

A P11D form is a form used by employers to list certain ‘benefits in kind’ provided to directors or employees. P11D forms are used to provide information to HMRC on all Benefits in Kind (BiKs), including those under the Optional Remuneration

What is a Share Incentive Plan?

Share Incentive Plans (SIPs) were first introduced in July 2000 to give employees tax and NICs savings when they buy or are given shares in the company they work for.

Provided all the qualifying conditions are met, shares which are obtained under a

Miscellaneous benefits in kind

The list of miscellaneous company benefits that can be provided tax-free to employees is quite short. However, some of the benefits that can be provided include the following:

Medical insurance or medical treatment for employees working

Vehicle benefit charges from April 2023

The vehicle benefit charges for 2023-24 have been announced. Where employees are provided with fuel for their own private use by their employers, the car fuel benefit charge is also applicable. The fuel benefit charge is determined by reference to

Accommodation expenses and benefits

There are special rules for the provision of living accommodation to employees under certain circumstances. In most cases, employees will pay tax on any living accommodation provided by an employer unless they qualify for an exception. However, where

Company Share Option Plans

There are a number of government approved share schemes which offer tax advantages to employees. One of these schemes is known as the Company Share Option Plans (CSOP). Under a CSOP, employees do not pay Income Tax or NICs provided the qualifying

Tax-free trivial benefits

There is a benefit in kind (BiK) trivial exemption that applies to small non-cash benefits like a bottle of wine, or a bouquet of flowers given occasionally to employees or any other BiK classed as ‘trivial’ that falls within the exemption. By taking

Claiming for mobile phones

When an employee incurs costs for the provision of mobile phones to employees it is important to understand the correct tax treatment of these expenses. This includes costs for phones provided to employees and reimbursement of employee’s own phone

PAYE settlement agreements

A PAYE Settlement Agreement (PSA) allows employers to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for their employees.

The expenses or benefits included in a PSA must

On your bike – cycle to work exemption

The Cycle to Work scheme was introduced over 20 years ago to help promote the use of healthy ways to commute to work using an environmentally friendly mode of transport.

The scheme allows employers to provide bicycles and cyclists’ safety equipment

Exempt loans to employees

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan. The benefit is the difference between the interest the employee pays, if any, and the commercial rate the employee would have to pay on a loan

Car fuel benefits for employees

The car fuel benefit rules only apply to company cars that attract a car benefit tax charge. This means the rules do not apply to fuel provided for use in an employee’s own car.

However, employers can pay up to 45p per mile for company related trips

A reminder of trivial benefit rules

We wanted to remind readers of the trivial benefits in kind (BiK) rules. The BiK exemption applies to small non-cash benefits like a bottle of wine, a bouquet of flowers given occasionally to employees, or any other benefit in kind classed as

Tax treatment of incentive scheme awards

Some companies use incentive award schemes to encourage their employees in various ways. For example, to sell more of their own goods and services. The award can include cash-based, vouchers or other gifts.

Where an employer meets the tax payable on

Exempt beneficial loans

An employee can obtain a benefit when provided with an employment-related cheap or interest-free loan.

Annual party benefits

The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax

Holiday entitlements if furloughed

The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme is open to all UK