WFM UK | Payroll UK: BIK Module - Other Items

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Overview

'Other Items' is used where a benefit does not sit neatly within a more specific category but is still recognised under HMRC’s benefits framework. This can include items such as professional memberships, subscriptions, or miscellaneous benefits that are taxable depending on their nature and circumstances.

HMRC guidance recognises that not all benefits fall into a single defined category. In practice, employers must determine the correct tax and National Insurance treatment based on the facts, including whether the item is taxable, whether National Insurance applies, and whether the charge arises immediately or can be payrolled.

Within the BIK module, this benefit type has been deliberately expanded to provide full flexibility, allowing employers to select from a comprehensive set of event types that cover all combinations of Income Tax and National Insurance outcomes. This ensures that even complex or unusual benefits can be recorded and processed correctly without needing to force them into an ill-fitting category.

Unlike more prescriptive benefit types (such as Company Cars), this category relies on the employer to determine the correct treatment before selecting the appropriate event type. The system does not decide liability automatically until an event type is selected.

This benefit type can therefore be used to:

• Capture miscellaneous taxable benefits not covered elsewhere

• Record professional fees or subscriptions that are not exempt

• Apply bespoke tax and NIC treatments where HMRC rules require judgment

• Maintain records of benefits that are informational only

Because of its broad scope, employers should ensure they understand the underlying HMRC treatment before selecting an event type. Where uncertainty exists, professional advice or internal policy should guide the decision.

This article explains how these events should be applied with BIK module considerations and how to calculate the benefit value. See below for some 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

• Choosing the Correct Event Type

• Event Types and Liabilities

BIK Module Configurations and Considerations

Other Items is designed as a flexible benefit type to support scenarios where a benefit exists under HMRC rules but does not align neatly with a more specific category, or where the tax and National Insurance outcome varies depending on the facts.

Unlike more prescriptive benefits, this type requires employers to determine the correct liability first and then select the event type that reflects that outcome. The BIK module does not infer whether Income Tax or National Insurance applies.

How to approach this benefit type

• Determine the correct treatment before entry
  Establish whether the item is subject to Income Tax, whether National Insurance applies, and whether the charge should be applied immediately or payrolled across the tax year. The appropriate event type should then be selected accordingly

• Manual entry of benefit value
  The module requires the user to enter the benefit value directly. There is no automatic calculation for this category because the underlying items can vary widely in nature

• Use as a catch-all where appropriate
  This benefit can be used where HMRC guidance recognises a taxable benefit, but there is no dedicated benefit type available in the system, or where multiple liability outcomes are possible depending on circumstances

• Record-only option available
  Where organisations wish to track items for audit or internal visibility without creating a tax or National Insurance charge, the record-only event type can be used

Important considerations

• This benefit type should not be used where a more specific benefit exists (for example, Company Cars or Private Medical), as those categories contain tailored logic and guidance

• Care should be taken to ensure items that may be exempt (such as allowable professional subscriptions or trivial benefits) are assessed correctly before applying a taxable event type

• Because of the breadth of scenarios covered, organisations should ensure consistent internal policy or guidance to support correct usage

Processing in the BIK Module

Other Items and their 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.

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 it 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.

Choosing the Correct Event Type

Select the event type based on the correct tax and National Insurance treatment of the item. First, determine whether the benefit is subject to Income Tax, then whether National Insurance applies and which class is due.

If Income Tax applies, decide whether it should be payrolled across the tax year or applied immediately. Then select whether Class 1A NIC, Class 1 NIC, or no NIC applies.

This benefit type should be used where a benefit does not fit a more specific category, and the liability must be determined based on the circumstances. If the treatment changes later, update the event type to reflect the correct position.

Event Types and Liabilities

Because Other Items can cover a wide range of scenarios, the calculation of the benefit value (cash equivalent) is consistent across all event types. What differs is how Income Tax and National Insurance are applied.

Select the event type that reflects the correct liability outcome for the item being provided.

Please Note: Some of the event types within Other Items may be used infrequently (such as where no tax or no NIC is attracted at all), as many benefits will typically fall into more common liability outcomes. However, the full range is provided deliberately to cover all possible scenarios and ensure flexibility, allowing organisations to accurately reflect the correct tax and National Insurance treatment where less common situations arise.

Available Event Types

Other subject to Income Tax (Payrolled) and Class 1A NIC:

• When applied to the BIK module, Income Tax will be handled by the system and payrolled over the tax year, with Class 1A National Insurance settled via P11D(b) after the end of the tax year

Other subject to Income Tax (Payrolled) and Class 1 NIC:

• When applied to the BIK module, Income Tax will be handled by the system and payrolled over the tax year

• Because this event type attracts Class 1 National Insurance, please read the National Insurance and Income Tax Handling for Payrolled Benefits article

Other subject to Income Tax (Payrolled) but not NIC:

• When applied to the BIK module, Income Tax will be handled by the system and payrolled over the tax year

• Nothing for this event type will or will need to be done manually for National Insurance Liability

Other subject to Income Tax (Immediate) and Class 1A NIC:

• When applied to the BIK module, Income Tax will be handled by the system and applied in full in the next pay period, with Class 1A National Insurance settled via P11D(b) after the end of the tax year

Other subject to Income Tax (Immediate) and Class 1 NIC

• When applied to the BIK module, Income Tax will be handled by the system and applied in full in the next pay period

• Because this event type attracts Class 1 National Insurance, please read the National Insurance and Income Tax Handling for Payrolled Benefits article

Other subject to Income Tax (Immediate) but not NIC:

• When applied to the BIK module, Income Tax will be handled by the system and applied in full in the next pay period

• Nothing for this event type will or will need to be done manually for National Insurance Liability

Other subject to Class 1A NIC, but not Income Tax:

• When applied to the BIK module, nothing will, or needs to be, done for this event type for Income Tax Liability, with Class 1A National Insurance settled via P11D(b) after the end of the tax year

Other subject to Class 1 NIC but not Income Tax:

• When applied to the BIK module, nothing will, or needs to be, done for this event type for Income Tax Liability

• Because this event type attracts Class 1 National Insurance, please read the National Insurance and Income Tax Handling for Payrolled Benefits article

Other (record only — No Tax and No NIC):
Used where the item is recorded for audit or visibility only, and no liability arises.

• When applied to the BIK module, nothing at all needs to be done in regard to Tax or National Insurance liability, as this event type is for recording purposes only

Working out the Taxable Amount

The taxable value (cash equivalent) is the full cost of the item or benefit provided by the employer, minus any amount made good by the employee.

This same calculation applies regardless of which event type is selected. The event type only determines how the liability is applied, not how the value is calculated. When the benefit value, thus cash equivalent calculated, is applied to the BIK module, the liability attracted based on the select event type above will process as expected.

For example: 

If an employer organises and pays £1,000 for a benefit recognised as "other", and the employee contributes £100, the calculation is:

£1,000
(Cost to the Employer)

minus

£100
(Amount paid by the employee, as a contribution toward the taxable benefit)

equals

£900
£900 is the taxable amount (or Cash Equivalent) to apply to the employee as a benefit.

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