How might non-cash income and benefits be taxed?

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

The charge to tax on employment income specifically includes not only cash payments but also ‘any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth, or anything else that constitutes an emolument of the employment’. The definition of benefit is very wide and covers items provided for/to the employee and for their family / household.

Types of non-cash earnings with a different treatment

There are some types of non-cash earnings which have special treatment which are outside the scope of this note. This includes the following items:

•
non-cash earnings provided through a third party rather than the employer may be subject to the ‘disguised remuneration’ rules. See the Disguised remuneration ― overview guidance note
•
employers may offer employees shares or share options. See the guidance notes on share schemes (see the Comparison of share schemes guidance note as a starting point)
•
employers may make contributions to pension schemes on behalf of their employees. See the guidance notes on pension

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