Tax Credit and "benefits in kind"

Slow_Fuse

My husband works for his family business (a shop). He earns under £200 a week before tax, works over 40 hours a week, and we get tax credits.
We stay in an owned flat above the shop and the shop pays for the gas, electricity and council tax on the house. Originally this was done years ago when his mum lived in the house, and it's not changed since.
Now, I never really thought about the shop paying for the utilities in relation to our tax credits, but his mum, in a fit of temper yesterday, flung it at us that we should be careful "they" don't find out about my husband's "benefits in kind" meaning the utilities. I don't know whether she meant income tax, or tax credits or whomsoever as the argument moved on, but I am now worrying that we may be in a potentially fraudulent situation.
I'm posting this in Tax Credits forum, but I'm going to ask something similar in the tax forum, as I want to know from both perspectives.
Can anyone help with some clarification.

wobin

If the business pays for your utilities that would be classed as a benefit in kind and you should inform tax credits how much this is per year.

I am not sure how it works on a tax return though.

DX2

http://www.adviceguide.org.uk/index/life/tax/benefits_in_kind.htm#what_are_benefits_in_kind

TAZ

Free lighting or heating

Additional benefits, for example, free heating or lighting provided with the accommodation are not taxable for employees in lower-paid employment. However, they are taxable for all other employees and directors unless one of the three exceptions applies.

AnxiousMum

Don't know the answer to your question, but why is she paying under the minimum wage??????

tyllwyd

There is a page here about tax credits and benefits in kind
http://www.hmrc.gov.uk/Taxcredits/start/claiming/income-hours/employer-benefits.htm

I don't have any special knowledge, but if rent/council tax/gas/electricity all count as benefits in kind, wouldn't that potentially amount to a pretty subtantial underdeclaration of your income for tax credits purposes?