Benefits in Kind in Autumn Budget 2025 Radar?
Published / Last Updated on 20/06/2025
The Labour Government has tasked many government bodies, including HMRC to find ways to make spending cuts or reduce the tax benefits burden on the Treasury without physically increasing real taxes on working people. Indirect taxes on employers, increased stamp duty rates for all, ever higher inheritance tax liabilities for all and now to include unused pension funds from 2027 are well known, but where else could Autumn Budget 2025 take us.
HMRC’s Research with Employers on Benefits in Kind (BiK)
Many employers offer benefits in kind to attract new talent as well as retain existing talent.
- Employer pension contributions are perhaps the most well-known benefits in kind that are not subject to income taxes or national insurance contributions but there are many benefits in kind that are taxable.
- Death in service cover – benefits are now included in lump sum death benefit allowance calculations for pensions, and any excess is taxable.
- Employer sick pay schemes, over and above statutory sick pay are subject to income taxes in the same as earnings.
- Private medical insurance premiums are subject to income taxes.
- Dental insurance premiums are subject to income taxes.
- Luncheon vouchers up to 15p per day are tax free, 15p won’t even buy you a packet of crisps. Any excess is a taxable BiK.
- Subsidised canteens and bars are not a taxable BiK.
- Childcare vouchers are not taxable.
- Cycle to work schemes are not taxable.
- Many employee share incentive schemes are not taxable.
- Company cars are taxable BiKs.
- Business expenses refunds are not taxable BiKs.
- Home working expenses are not taxable BiKs provided they are reasonable.
- Travel pass loans are not taxable BiKs.
- Electric vehicles charging at work are not taxable BiKs.
- Private mileage for petrol/diesel cars is taxable.
- Eye tests paid by employer are not taxable BiKs.
- Professional fees are not taxable BiKs.
- Uniforms are not taxable BiKs.
- Uniform cleaning is not a taxable BiK.
- Tools for work are not taxable BiKs.
- Free car parking spaces at work are not taxable BiKs.
- Business entertainment and tickets are taxable.
- Wage streaming payments are not taxable BiKs.
- Loans to employees at or above 2.25% pa interest are not taxable BiKs.
We could go on but as you can see there are many perks that employers can offer employees that do not get taxed.
Wonder why HMRC has conducted its latest review with employers on benefits in kind? It is to work out how to maximise tax revenue without hurting individual taxpayers too much.
Be prepared for the Autumn Budget 2025 where there could be an attack on employee benefits in kind that are not currently taxed. This again will mean more revenue to HM Treasury but without technically increasing direct taxes on working people.
We bet subsidised bars and canteens at Westminster remain non taxable BiKs but your car parking space may be.
