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Overview
Assets Placed at the Employee’s Disposal covers situations where an employer makes an asset available to an employee for their use or benefit. HM Revenue & Customs treats this as a taxable benefit when the asset is not provided solely for business use, and the employee derives a personal benefit from having access to the asset.
Examples include, but are not limited to, tools, equipment, devices, or other tangible items that are available for private use.
Under HMRC rules, where an asset is provided to an employee in a way that creates a private benefit, the cash equivalent of that benefit is calculated as the cost to the employer of making the asset available, typically net of any amount the employee pays toward the asset. This taxable value is then used to determine the Income Tax and National Insurance liabilities.
Within the BIK module, this benefit type is represented by a single event type: “Automatically Handled.” This reflects that there is only one possible outcome where a taxable benefit arises: Income Tax is payrolled across the tax year, and Class 1A National Insurance (employer only) is due at year-end via P11D(b). There are no alternative event types for other outcomes within this benefit type.
If an asset is provided strictly for business purposes and private use is insignificant, HMRC considers the arrangement non‑taxable. In such cases, the asset should not be recorded under this benefit type.
For detailed guidance on which assets are treated as benefits and how to value them, see GOV.UK: Expenses and benefits - assets available to employees.
This article explains how these events should be applied with BIK module considerations and how to calculate the benefit value. There are a number of other articles to assist with preparing and processing benefits in the BIK module:
- For creating this benefit type at company level, go to Configuring Company Benefits
- For applying benefits to employee records, go to Applying Benefits to Employees: Manual & Data Imports
- For how this looks in Payroll when processing, go to How Payrolled Benefits are Reflected in Payroll
- For National Insurance and Best Practices, please read the National Insurance and Income Tax Handling for Payrolled Benefits article.
Contents
- BIK Module Configurations and Considerations
- Event Type: Automatically Handled
- Working out the Taxable Amount
BIK Module Configurations and Considerations
Assets Placed at the Employee’s Disposal is represented in the BIK module by a single event type: “Automatically Handled.” This reflects that there is only one possible outcome: Income Tax payrolled across the year and Class 1A National Insurance via P11D(b). No alternative event types exist.
Key points for configuring and processing this benefit:
Determining the benefit value:
Employers must calculate the benefit value of the asset provided. This is generally the cost to the employer of making the asset available, minus any amount paid by the employee toward the asset. The BIK module does not automatically calculate this value, so the user must enter it manually.Payroll interaction:
Once the benefit value is entered, the BIK module applies Income Tax payrolled across the year and Class 1A NIC at year-end via P11D(b).Exemptions and HMRC rules:
Assets provided solely for business purposes, with insignificant private use, are non‑taxable. Only assets that confer a personal benefit to the employee should be recorded under this benefit type.
Assets Placed at the Employee’s Disposal and its different event types can all be treated either as a one-off event or as a benefit held over a period of time, depending on the nature of the benefit being provided.
Please Note: If the benefit is a Trivial Benefit but you still wish to record this in the BIK module, then consider using the "Other" Benefit type, also selecting the event type that attracts no Income Tax or National Insurance Liability. See here for more information: BIK Module - Other Items
One-Off Events
Examples of one-off payments include bills or ad-hoc reimbursements for services or goods. The full taxable value arises at the point the payment or reimbursement occurs.
Company-Level Configuration
When configuring this benefit at company level:
Set the benefit to retain until the end of the tax year for leavers to ensure the taxable value is always fully applied.
Since this is a single transaction, do not configure pro-rating based on duration of employment.
Employee-Level Configuration
When configuring this benefit at employee level, within the current version of the BIK module, Benefit Start and Benefit Stop dates are used to calculate pro-rated values. While this logic is appropriate for ongoing benefits, it does not automatically align with the treatment of one-off events.
Enter the full value of the payment as the benefit value
Set the Benefit Start and Benefit Stop dates to the full tax year to avoid incorrect pro-rating.
With this configuration, even if the employee leaves, the full taxable value of the payment will be taxed correctly.
Time-Based or Recurring Benefits
Some payments, such as professional memberships or subscriptions, are linked to a period of time rather than a single transaction. The taxable value can be calculated proportionally based on the duration the employee holds the benefit.
Company-Level Configuration
Retain the benefit, or not all, just be aware that prorating will occur if the employee is made a leaver unless the benefit is retained until the end of the tax year.
Employee-Level Configuration
Enter the full value of the payment as the benefit value
Set Benefit Start and Benefit Stop dates to reflect the period the employee is entitled to the benefit
The module will pro-rate the cash equivalent based on the benefit value, and on the number of days the benefit is held for
Note: If the benefit is time-based, but a prorated benefit value is entered instead (Benefit providers may provide a prorated amount already), then determine a full tax year benefit value, or treat as a one-off event as above.
Ongoing Enhancements
The current release of the BIK module fully supports compliant processing of this benefit type for income tax purposes. While certain behaviours, such as date-based pro-rating, require deliberate configuration for this benefit type, the correct legislative outcome can be achieved through the setup approach outlined above.
Employers can therefore operate this benefit accurately by applying the prescribed configuration.
Future enhancement phases will further refine benefit-specific behaviour to reduce manual intervention, increase automation, and more closely reflect the distinct legislative treatment of one-off benefit events such as Assets Transferred.
Event Type: Automatically Handled
This event type applies when an asset is provided to an employee in a way that creates a personal benefit. Because there is only one outcome, the BIK module applies payrolled Income Tax across the year and Class 1A National Insurance at year-end via P11D(b).
Income Tax Liability |
National Insurance Liability |
Payrolled, across the Tax Year |
Class 1A (Employer Only), P11D(b) |
Working out the Taxable Amount
Employers must determine the benefit value of the asset, which is generally:
The cost to the employer of making the asset available,
Minus any contribution paid by the employee, if applicable.
The BIK module currently requires the user to manually enter this benefit value; it does not automatically calculate it.
For Example:
An employer provides an employee with a laptop for mixed use (business and personal). The laptop cost £1,200, and the employee contributes £200 toward the cost.
Step 1: Determine cash equivalent
Cost to employer: £1,200
Employee contribution: £200
Cash equivalent (taxable benefit): £1,000
Step 2: Enter benefit in the BIK module
Enter £1,000 as the benefit value for the asset
Step 3: Payroll and NIC treatment
The BIK module will apply Income Tax payrolled across the year,
Class 1A NIC will be reported at year-end via P11D(b).
Important Note:
If the asset is provided solely for business purposes with insignificant private use, it should not be recorded under this benefit type. Only the portion of the asset representing a personal benefit is captured.
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