Fringe benefits

Fringe Benefits, very generally, are a benefit given to an employee, or an expense paid on behalf of the employee, by an employer as a reward instead of cash. The most common and well-known benefits are probably cars and fuel.

If benefits are provided by the employer for an employee, tax is due on the cost to the employer, as if a cash payment was being made. The employee suffers tax at his marginal rate

What does it mean to me as an employer?
If you provide benefits for your employees or pay expenses on their behalf then you are required, by law, to maintain certain records and submit various returns to the Inland Revenue.

Various forms must be completed, depending on the type of fringe benefit, for any employee who received them. The value of the benefit, in most cases, is the cost to the employer of the benefit/expense. However some benefits require detailed calculations to arrive at the amount which will go on a employee's FS3 which will subsequently be charged to tax. There are also in existence certain forms which need to be completed to reduce certain benefits.

As with most returns and payment due to the Inland Revenue, penalties can be imposed if returns are made late and interest is charged on payments made late. There are also penalties for incorrect returns.

How can Grant Thornton help?
We can either manage your responsibilities for you, if provided with the necessary information, or we can guide and remind you. We have vast experience with Fringe Benefits and related issues.

We have specialists who deal with such matters on a daily basis and therefore have the resources to save you valuable time and effort.