‘Benefits in kind’ are the employment perks that employees or directors receive and that aren’t included in their normal salary – find out more detail here [link to Q#5]
On the whole, the same ‘benefits in kind' rules apply for both employees and directors. But it’s worth noting the consequences of an overdue director’s loan account, as this is something many people get caught out by.
This situation arises if you’re a shareholder and a director, and you owe the company more than £10,000 at any point in the year. If you pay no interest, or you pay interest below the official rate, you would have a benefit in kind to report. You’ll then be required to pay additional corporation tax and Class 1 National Insurance, depending on the amount in question.
If you’d like some help with the tax treatment of your director’s benefits in kind, us a call on 01454 300 999, or drop an email to firstname.lastname@example.org