Exemptions and concessions
The Income Tax Act 1970 - Income Tax (Benefits in Kind) (Exemptions) Order 2007 confers powers to Treasury, described in section 2G (4) of the Income Tax Act 1970, to provide for some exemptions to Benefits in Kind.
Currently the following benefits in kind are exempt from a charge:
- accommodation used solely for performing duties - not just part of employment requirements - an employee is not charged a benefit in kind for heating and lighting when at work performing contracted duties
- broadband connection
- car parking fees used principally for business purposes
- car parking free or subsidised (used principally for business purposes)
- Christmas party expenses up to £100 per head
- commercial vehicles such as a van or lorry where the main business purpose is the transportation of goods or materials used within the trade; or the transportation of goods in the course of conducting a delivery service; or the transportation of the tools or equipment used by the employee in performing their duties
- electric cars (does not include hybrid petrol/electric cars)
- meals in work's canteen
- medical insurance, dental insurance and health screening for employees provided by an employer's scheme. This exemption only applies to the cost of any medical insurance for the employee and any amount paid by the employer in respect of an employee’s spouse or family member will be a reportable benefit in kind
- mini buses
- mobile telephone - where contract is in the name of the employer
- nursery or crèche facility expenses necessary to enable employees to attend work
- other benefits not specifically excluded which do not exceed £400 per annum in total (not including car or car fuel benefits)
- personal computer supplied at the expense, wholly or partly, of the employee’s employer for use at the employee’s home. It includes devices designed to be used by being connected to or inserted in that computer. To the extent that the aggregate cash equivalent of the benefit does not exceed £1,000 the benefit in kind charge will be exempt. Where the aggregate cash equivalent exceeds £1,000, only the excess over £1,000 shall be chargeable to income tax as a benefit in kind
- provision of a scheme to provide benefits to employees or dependents on retirement or death
- public transport season tickets or multi journey tickets provided by the employer
- sports and recreational facilities at an employee’s place of work.
In addition, the following benefits are not chargeable by concession;
- Approved Profit Sharing, Savings Related Share Option Schemes or similar schemes are not chargeable by concession providing that the rules of the scheme are applied correctly. Non approved schemes are chargeable and must be reported
- reasonable relocation expenses payments made by an employer as a direct result of an employee moving to the Island to take up employment.