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Where Taxpayers and Advisers Meet

Benefit in Kind

PRC
Posts:4
Joined:Sat Nov 08, 2014 12:04 pm
Benefit in Kind

Postby PRC » Fri Jun 15, 2018 12:04 pm

Hi
I am a director of a LTD company, I own an apartment which is rented out at the moment and a company car, these combined reduce the amount I can earn before tax down to £5000.
The company i work for is going to rent me an unfurnished apartment near work at a cost of £7800 pa. This will now be treated as benefit in kind and i am assuming this will be for the full £7800. I am to pay council tax and utilities.
Can anyone tell me what in real terms this will reduce my monthly wage by please. I am hoping it can be worked out from the £7800 and i do not have to put wage up.
If this is possible i would love to hear from you, just working out whether it is viable or should i relocate.
Regards
PRC

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Benefit in Kind

Postby bd6759 » Fri Jun 15, 2018 6:21 pm

Why does getting benefits from your company reduce your wage?

someone
Posts:691
Joined:Mon Feb 13, 2017 10:09 am

Re: Benefit in Kind

Postby someone » Sat Jun 16, 2018 8:09 am

Why does getting benefits from your company reduce your wage?
It reduces your take home pay because the tax on the BIK is paid from your cash income.

I think for the OP the tax and NI due will be in the range 30-50% of the BIK depending on their marginal tax rate (roughly 200-300 per month in additional tax)

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Benefit in Kind

Postby bd6759 » Sat Jun 16, 2018 10:40 am

The OP says it reduces the amount he can earn, not the amount he takes home.

PRC
Posts:4
Joined:Sat Nov 08, 2014 12:04 pm

Re: Benefit in Kind

Postby PRC » Mon Jun 18, 2018 9:02 am

Why does getting benefits from your company reduce your wage?
It reduces your take home pay because the tax on the BIK is paid from your cash income.

I think for the OP the tax and NI due will be in the range 30-50% of the BIK depending on their marginal tax rate (roughly 200-300 per month in additional tax)
Thanks for the advice, I have also been told as a basic rate tax payer I can expect to loose 20% of the £7800 in monetary terms. Fingers crossed. Cheers for taking the time.
Regards Peter


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