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TAXguide 10/19: Expenses and Benefits

This TAXguide looks at the charge to tax on benefits and expenses, associated exemptions and deductions and, where a tax charge arises, the calculation of the taxable amount. It also examines the reporting obligations which result from the provision of expenses and benefits, and also at ways in which this burden can be reduced.

Overview

TAXguide 10/19

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The regime for taxing expenses and benefits was significantly reformed from 6 April 2016. From that date, subject to a limited exemption for lower paid ministers of religion, the benefits code applies in its entirety to all directors and employees regardless of their earnings rate.

Prior to 6 April 2016, the benefits code only applied to directors regardless of their earnings rate (other than certain full-time working directors and certain directors of charities and non-profit making concerns) and to employees earning at the rate of at least £8,500 a year.

The content that follows covers the regime for taxing expenses and benefits as it applies from 6 April 2016, with the legislation as it applies for the 2019/20 tax year unless otherwise stated.