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RD 38: Contributions to funds, trusts, and insurance premiums
or “Employer payments for employee benefits and insurance”
You could also call this:

“Tax rules for benefits from charitable organisations”

When a charitable organisation gives you benefits through a short-term charge facility, the value of these benefits includes the money they pay for goods and services you get, any other consideration they provide for these goods and services, interest on buying or hiring them, and sometimes account fees for credit cards.

If you work for a charitable organisation, they might have to pay fringe benefit tax (FBT) on benefits they give you. This applies if the benefit is provided through a short-term charge facility and is considered a fringe benefit under section CX 25(1).

Your employer needs to pay FBT every three months if the value of your benefit in the first three months is no more than $1,200 or 5% of your yearly pay, whichever is less.

The amount of FBT your employer pays depends on the total value of benefits you’ve received since the start of the tax year. If this total is more than $1,200 or 5% of your yearly pay (whichever is less), your employer might have to pay FBT.

Your employer doesn’t pay any FBT if the total value of your benefits for a three-month period is below the limit. If it’s the first time the total goes over the limit, they pay FBT on the whole amount. For other times, they pay FBT on the value of benefits given in that three-month period.

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Next up: RD 40: Goods

or “How your employer values goods given to you as a benefit”
Next

Part R General collection rules
Employment-related taxes: Value of fringe benefits

RD 39Benefits provided by charitable organisations

  1. The value of a benefit under section CX 25(2) (Benefits provided by charitable organisations) that a charitable organisation provides in a short-term charge facility is the sum of—

  2. the amount that the organisation pays for or towards buying or hiring the goods and services obtained by the employee under the short-term charge facility:
    1. the amount that the organisation pays for or towards consideration, other than money or money's worth, for goods and services obtained by the employee under the short-term charge facility:
      1. any interest incurred in relation to buying or hiring the goods and services or obtaining other consideration for the goods and services:
        1. when the short-term charge facility is a credit card or charge card provided for an employee’s use solely for purposes unconnected with the organisation or its operations, the associated account or service fee.

          1. Subsections (3) and (4) apply in a tax year to an employer that is a charitable organisation when—

          2. the employer provides a benefit to their employee in a short-term charge facility that is a fringe benefit under section CX 25(1); and
            1. the employer is required to pay FBT for the tax year on a quarterly basis; and
              1. the value of the benefit in the short-term charge facility in the first quarter of the tax year is no more than the lesser of $1,200 and 5% of the employee’s salary or wages for the tax year.

                1. The employer’s liability to pay FBT on a benefit provided in a quarter of the tax year depends on whether the taxable value of all the benefits (the accumulated value) that the employer provides to the employee in the period from the start of the tax year to the end of the quarter is more than the lesser of $1,200 and 5% of the employee’s salary or wages for the tax year (the threshold value).

                2. The employer is liable to pay FBT for a quarter of a tax year on the following amounts:

                3. zero, if the accumulated value for the quarter is no more than the threshold value:
                  1. the accumulated value if the quarter is the first in the tax year for which the accumulated value is more than the threshold value:
                    1. the taxable value of all the benefits provided in the quarter, if neither of paragraph (a) and (b) applies.

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                      Notes
                      • Section RD 39(1)(ab): inserted, on , by section 84(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                      • Section RD 39(1)(b): amended, on , by section 84(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                      • Section RD 39(2)(c): amended, on , by section 84(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                      • Section RD 39(3): amended, on , by section 84(4) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
                      • Section RD 39(4)(c): amended, on , by section 84(5) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).