Holiday Vouchers vs Holiday paid by company BIK

carboot_karaoke

Hi everyone  I'm hoping that you can help me.

I have earned a bonus from work l could, have it paid through the normal payroll system.  However,  because l intended to use the money for a family holiday . The accountant at work suggested that the company could arrange book and pay for the holiday on my behalf.

The value would be recorded on a P11D. I understand that l would have to pay tax on the benefit but no national insurance or pension making a significant saving.

I did have a look on the Gov website and noticed that holiday vouchers are also listed as a benefit but I don't understand the difference?? To me, or the implications to the company.

Finally, if indeed, l do accept a holiday or vouchers as a bonus how and when do l pay the tax due? 

Many thanks 

Brie

Sounds like it being done as some sort of salary sacrifice.  

The tax would be deducted from your pay at the same time as the benefit is given to you.  Where I used to work I had "free" medical insurance which cost the company £65 a month.  As this was a benefit to me the £65 was added to my pay after NI etc was deducted but before tax was deducted.  So while being free it cost me about £12 a month in tax

carboot_karaoke

Brie said:

Sounds like it being done as some sort of salary sacrifice.  

The tax would be deducted from your pay at the same time as the benefit is given to you.  Where I used to work I had "free" medical insurance which cost the company £65 a month.  As this was a benefit to me the £65 was added to my pay after NI etc was deducted but before tax was deducted.  So while being free it cost me about £12 a month in tax

Many thanks for your response 😊. 

Jeremy535897

Some information here, from the employer's point of view (but explaining what the employee pays too):
https://www.gov.uk/expenses-and-benefits-holidays/what-to-report-and-pay

carboot_karaoke

Thanks for the link 😊. Do you know what the difference is between  Class 1 and  Class 1A Nic  ? Seems to be the only difference between holiday vouchers and a holiday the company pays for.  

sheramber

class 1A is paid by the employer. Current rte in 13.8%.

Class1 is paid by the employee.