Benefits in Kind and Revenue Audits

Posted in Our Blog, Revenue Audit, Taxation

Based on our recent experiences with Revenue Audits it has transpired that a particular area of Revenue interest is whether benefits-in-kind have been taxed through the employer’s payroll correctly or if at all.

Subject to certain exceptions, benefits-in-kind including private use of a company car, free or subsidised accommodation and preferential loans from an employer to an employee whose total remuneration (including benefits-in-kind) is €1,905 or more in a tax year are taxable.

Where the employee receiving such benefits is a director of the company concerned, the benefits are taxable regardless of the level of remuneration.

The following is a non-exhaustive list of sample benefits which if paid by an employee’s employer may be taxable:

  • Private use of company cars / vans
  • Free or subsidised accommodation
  • Preferential loans
  • Medical insurance premiums
  • Crèche / childcare facilities
  • Sports and recreational facilities
  • Private use of corporate charge cards
  • Professional subscriptions i.e. where the employer pays a subscription to a professional body on behalf of the employee and which is not in relation to the business of the employer.
  • Exceptional performance awards
  • Staff suggestion schemes

We advise that in light of the above all employers should review any benefits paid by them on behalf of employees to avoid a possible Revenue Audit and interest and penalties.

It is also advisable that employers review on an annual basis any payments made for employees in order to take account of any increases / decreases in the annual cost e.g. medical insurance premiums.

If you wish to discuss the tax implications of the above please call me on 021-4310266.

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