Third party benefits
Your employee may receive a benefit from a third party in connection with their employment with you. In general, these are taxed as a benefit in kind. The employee is chargeable on the benefit under the Pay As You Earn (PAYE) system to:
The third party who provided the benefit is generally responsible for accounting for the tax liability.
Typical taxable third party benefits are:
- the use of cars and vans.
Other third party benefits
Other third party benefits are also generally taxable. These will not be taxed as a benefit in kind if all of the following apply:
- The third party provider of the benefit is not connected to you, either directly or indirectly, in any way.
- There is no arrangement or scheme in place between the third party provider and you, or anyone connected with you.
- You have not paid any amount, either directly or indirectly towards the benefit.