Practical tips for employers
It is possible for employers to give their team non-cash rewards for their loyalty or generally as part of their remuneration package. Some of these “benefits” are even exempt from tax and national insurance so the employee can enjoy more, for less. Here are 10 ideas for your team.
10 popular tax-free benefits for employees
At Christmas time, which will creep up soon enough now, you can treat your employees and their partners to something festive for their hard work in the year. Just don’t spend over £150 per head and there won’t be any tax implication.
Mobile phones
Another tax-free benefit is providing your employee with a mobile phone. It’s essential that the contract is in the name of the company or business though, not the employee. If you simply wish to reimburse the employee for their own phone contract, tax does apply.
Free Parking
Parking can add up for employees and it is a great gesture to pay for their parking costs. This can be for parking either at the work location, or nearby. No tax applies to this benefit so it could be something extra you can offer your employees as part of their package.
Mileage for business trips
Mileage for business trips can be claimed by an employee at 45p per mile for the first 10,000 miles, and 25p thereafter. There is no tax implication, but the trip must be for business purposes – home to work, and vice versa, doesn’t count.
Sports facility
It’s possible to pay for your employees to have a sports facility, such as a gym, and your employee will incur no cost for the usage. It isn’t possible to pay for a public gym membership though, it needs to be a private facility. Still, if you have some space at your practice?
Childcare vouchers
Childcare vouchers are a popular way to reward employees with a family. Vouchers can be given, tax-free, up to a value of between £25 or £55 per week, depending on when the employee joined the scheme and if they are a higher-rate or basic-rate tax payer.
Removal costs
Often employees relocate due to their new job. Subsequently, you are able to cover their moving costs, up to £8,000, without the employee paying any tax. Could be a good way to “seal the deal” for a new employee as they will get a nice tax-free benefit to get them set up.
Loans
It is possible for you to loan your employee money, tax free. Up to the value of £10,000 is fine, after that tax will apply.
Bicycles and Cycling equipment
A company bike and helmet can be provided to an employee so they can cut their cost of travel and keep fit at the same time. The only rule is that the bike must be used predominately for work purposes, although “reasonable” personal use is allowed.
Minor benefits
If you want to buy a gift for your team or a particular employee, perhaps on their birthday or as a treat for meeting targets, trivial benefits costing under £50 are non-taxable, up to a total value of £300 per year.
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