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Company paying for employees holiday

Company paying for employees holiday

If a company pays directly for let's say an employees holiday, this would create a BIK.

But would save the employee Class 1 NIC (and employer NIC would switch to Class 1A). If they earned below the NIC upper limit, this would save them 12%.

The benefit would be reported on the employees P11D, so when would his tax code be altered to collect the tax on the benefit?


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By JimFerd
26th Feb 2016 14:20

If this holiday was paid for right now (and the employer arranged it)...

Assuming the employee doesn't do a tax return, HMRC will find out about it once the P11D is filed in July 16.

Once that's done, HMRC will probably issue a tax calculation and ask the client to pay it in one lump. Most likely in around August 16.

They might alter the tax code for the 16/17 year on the assumption that the benefit will arise again.

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