There are a number of ways that employers can provide tax-free benefits in kind to employees. The provision of these benefits does not create a tax charge for the employee and is not subject to any National Insurance Contributions (NIC).
The cost of providing these benefits is an allowable deduction for the company in calculating the Corporation Tax liability. The provision of these benefits can form part of an overall remuneration strategy that rewards and incentivises staff.
Here are some benefits that can be provided tax-free:
Getting to work
There are three key ways you can help your staff with their commute.
One mobile phone can be provided per employee (this includes phones given to family members of employees) with no tax consequences. The company should take out the contract and provide the phone. Where an employee contracts for a phone personally and is reimbursed by the company a benefit in kind still arises.
It is possible to assist your employees with childcare costs. There are two ways of assisting:
Benefits provided to an employee that cost less than £50 may qualify as ‘trivial benefits’ if they are not cash or vouchers, are not provided as a reward and are not contractual. The trivial benefits are not subject to tax or NIC deductions but cannot form part of a salary sacrifice arrangement. The trivial benefits paid to a director are subject to an annual cap of £300.
If you would like any further details on the tax treatment of the benefits mentioned above please contact Sam Pooley or your usual Armstrong Watson contact.
If you'd like any more details on the tax treatment of the benefits above, contact Sam Pooley or you usual Armstrong Watson contactemail Sam
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