How is tax on benefit in kind calculated?

polymaff

TheCyclingProgrammer wrote: »

If you're referring to the dividend allowance, only those whose non dividend income exceeds the higher rate threshold will be paying higher rate tax on the extra £3k.

Those are the ones I had in mind. For them, the £5k zero rate Dividend Allowance was an unexpected gift when what they usually get out of Budgets / HMRC actions is buckshot. Now they can be forgiven for thinking that the shotgun is once again, firmly targeted on them.

lisyloo

For me personally this is not an issue.
The reason I'm asking at the end of the tax year, is to adjust the dividends, so that my salary, benefits and dividends come under the £43K mark.


If you have income such that you exceed the £40K pension allowance plus £43K basic rate tax allowance, then perhaps you should be one of the groups targeted to contribute a little more?


Anyway, thanks all for the info. I have it clear in my head now.

zagfles

TheCyclingProgrammer wrote: »

Some benefits are added directly to your monthly pay and you will pay extra income tax and NI as if they were earnings, at your marginal rate of course.

Other BIKs attract NI on your payslip but will be reported on your P11D and taxed by an equivalent reduction in your personal allowance.

What BIKs attract employee NI?

TheCyclingProgrammer

There's a table showing which benefits attract Class 1 NIC here:

https://www.gov.uk/government/publications/cwg5-class-1a-national-insurance-contributions-on-benefits-in-kind/2016-class-1a-national-insurance-contributions-on-benefits-in-kind#app1

zagfles

TheCyclingProgrammer wrote: »

There's a table showing which benefits attract Class 1 NIC here:

https://www.gov.uk/government/publications/cwg5-class-1a-national-insurance-contributions-on-benefits-in-kind/2016-class-1a-national-insurance-contributions-on-benefits-in-kind#app1

Thanks - never heard of BIKs attracting employee NI (ie class 1, rather than 1A)...they seem to be mostly stuff the employee contracts for which is fair enough as that's pretty much the same as getting paid and using pay to buy it. Probably stuff that's pretty rare for a normal employer to pay for.