How are benefits-in-kind calculated?

When an employer provides payments to an employee in a form other than cash, this will normally give rise to a benefit in kind. These are normally calculated at their ‘cash-equivalent value’ which is defined as ‘the expense incurred in or in connection with provision of the benefit’, inclusive of VAT.

Any amount made good by the employee towards the cost of the benefit will usually reduce the chargeable amount accordingly.

These are the general rules; certain benefits have their own rules.