A benefit in kind (BIK) is a non-cash benefit an employer provides to an employee, which has a monetary value but is not paid as salary. These benefits, also called fringe benefits or perks, include things like company cars, private health insurance, gym memberships, or accommodation. Although not cash, these benefits are considered part of taxable income and are subject to tax rules based on their value and nature.

Key Examples of Benefits in Kind

• Company car for personal use
• Private health insurance
• Job-related mobile phone contracts
• Accommodation provided by employer
• Staff meals
• Loans or travel expenses not related to business

Tax Treatment

Benefits in kind are usually taxed by adding their value to the employee's income, which then incurs income tax. Each type of benefit has specific valuation methods for tax purposes. Some small benefits may be tax-exempt up to certain thresholds, but generally, they must be reported and taxed under systems like PAYE.

In summary, a benefit in kind is a non-cash perk from an employer that has monetary value and is typically taxable as income for the employee. They are an alternative or supplement to salary payments.