when is tax or PAYE paid by an employer a benefit in kind? when its not PAYE("an employer's tax")? and personal tax only?
PAYE Settlement Agreement
If you have benefits that theemployer provides but the employer wants to pay the tax then it should settle into a PAYE Settlement Agreement with the Inland Revenue. Otherwise the employee has to settle any tax liability and the employer should not be paying it. If the employer is paying tax and its not covered under a settlement agreement then it would have to be treated as BIK.
That would be my view.
A personal tax bill paid by an employer is taxable, not as a benefit-in-kind but as addtional salary and so subject to PAYE tax and NI at the time of payment.
PAYE tax paid, other than via a net pay arrangment, is not a benefit-in-kind except where the individual concerned is a director (unless they are a working director without a controlling interest in the company in which case the same rules as for other employees apply - i.e. not a benefit-in-kind).
Just for information - the reason the payment of PAYE tax escapes a BiK charge for employees is that primarily the liability to account for it is that of the employer and so there is strictly no personal benefit to the employee.
Good point Tony.