Draft guidance on tax exemption for trivial benefits in kind
15 February 2016
Draft guidance has been published on a new exemption for low value benefits in kind ('trivial BiKs') to be included in the Employment Income Manual (EIM).
In December 2015 the government published Draft legislation: Income Tax exemption for trivial benefits in kind to be included in Finance Bill 2016 (FB16), together with explanatory notes. These included legislation to give effect to a tax exemption for low value trivial BiKs.
Draft regulations were also published to:
- extend the exemption to trivial BiKs provided to former employees
- give effect to a matching disregard for National Insurance contributions (NICs).
A Technical Note setting out how the exemption would work in practice was also published.
Draft guidance has now been published for inclusion in the Employment Income Manual (EIM).
It is proposed that the new exemption is included in FB16 to apply for the 2016 to 2017 tax year and subsequent tax years. Once FB16 has received Royal Assent, the Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) Regulations 2007 (the ‘EFRBS Regulations’) will be amended to extend the exemption to trivial BiKs provided to former employees. This will be backdated to the start of the tax year.
Comments are being asked for by Friday 25 March 2016. If you would like to comment on the guidance the Policy Team would be more than happy to compile and submit on members’ behalf. Please email policy by Friday 11 March if you would like us to assist.