Treatment of benefits in kind

Consultations on making good benefits in kind and PSA settlements have been published on HMRC’s website. Summaries follow.

Making good on benefits in kind

The consultation explores the scope for aligning the making good rules for benefits in kind with those that apply to making good when the employer accounts for the benefit in kind in real time through PAYE. HMRC proposes that making good should take place by the end of the tax year except when there are practical difficulties in doing so. In these cases which include car and van fuel benefit credit tokens and beneficial loans making good can take place up to 1 June after the end of the tax year.

Making good is where an employee gives something usually a cash payment to the person providing the benefit in kind thereby reducing the cash equivalent of the...