Bik

I am wondering what the benefit is to my employees if I as a small business owner provide benefits to my employees like health (VHI etc) or company cars, etc.

It seems every benefit I offer to my employee's is not a real benefit at all because a BIK is applied to most benefits. The BIK effectively forcing the employee to pay tax etc on the benefit.

Would the employee not be better off if I simply gave them the cash equivilent ? It seems all that happens is that I take on extra admin hassle to run a company health scheme (for example), while employees get no benefit from this at all ?

Does anyone have advice or experience with this ?

Are there any benefits which do not incurr BIK, perhaps a gym membership ?

bonanza said:

I It seems all that happens is that I take on extra admin hassle to run a company health scheme (for example), while employees get no benefit from this at all ?

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In many cases you are probably right but don't VHI offer 10% off for Group Schemes?

Company mobile phones are still exempt. So are free parking spaces. Basically anything that employees in the department of Finance get will not incur BIK (or am I just being cynical/flippant)

Almost all benefits paid to a employee have BIK implications
The benefit to the employee is the total cost less tax

Lets say you provide VHI cover at 1200 per annum. (I'm ignoring the Gross /Net situation for the sake of simplicity.)
The employee pays tax @ his marginal rate 1200 @ 48% = 576
The benefit to the employee is 1200-576= 624

AFAIK Provision of a parking space (where the employer pays for it) does not have BIK implications.
You also can pay 250 bonus tax free per annum.
Don't know any others

Post crossed with Purple

subsidised canteen, as long as open to all.

if not canteen, might extend to subsidised sandwich delivery?, guessing you have an accountant/tax advisor to bounch that bit off.

The Revenue BIK booklet is worth checking in this context:

[broken link removed]

Company mobile phones are still exempt

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As far as I'm aware mobile phones are liable to BIK for personal calls. However if the employee makes a small contribution towards personal calls then no BIK applies. I think most of the calls would have to be work related. If revenue thought that the system was being abused they may shut down this avenue to you. Then you the employer and the employee could be in trouble. But who knows.