Employee Benefits - Our 3 Favourite Tax Saving Tips
Do you have employees?
Do you wonder how you can remunerate them and motivate them in a tax efficient manner, whilst keeping your business running smoothly and efficiently?
If so, you may looking to use a few tax efficient employee benefits to accomplish these goals.
What Are Employee Benefits?
If 'employee benefits' is taken literally, you would think the benefit sits with the employee. But with 66% (according to a Capita 2015 survey) of staff saying they would stay with an employer that offered good benefits, it's clear that employers gain too.
For employees, a benefit package can help plan for old age and unexpected events (like becoming ill or injured), and can save them a bit of money on day-to-day expenses too.
For employers, a strong, relevant and well-communicated employee benefits package helps them get the pick of employees at recruitment, and retain happy workers.
Here are some of the most common employee benefits:
- Benefits that provide for old age - A pension
- Benefits that provide for illness or injury - sick pay, income protection, private medical insurance, critical illness insurance etc.
- Benefits that provide for death - Life Insurance
- Other benefits - share schemes, company cars, car allowances etc.
Our 3 Top Tips For Employee Benefits!
- Employees who pay towards the cost of their private company car use get a reduced tax charge.
- The Cycle to Work Scheme is a tax and NI-free perk; use it to save tax and get your employees fit and they can claim 20p as the approved mileage rate for using a bicycle!
- Employee Benefits in Kind are tax exempt if they cost you less than £50.
Our 3 employee benefits tax tips are:
- Use the Fit for Work scheme & get tax relief on £500 of medical treatment for sick employees.
- You can offer a new employee £8,000 of tax-free cash to assist with their relocating expenses.
- Up to £25 per day can be paid tax-free to employees if you use the Taxman's benchmark subsistence rates.
Our Employee Benefits Call To Action
If you know of any other great employee benefits tax tips that can be shared with our readers then let us know via the comments or through LinkedIn.
Don’t be shy about claiming or using you legitimate employee benefits from the tax man - good for you, your business and your employees!
The PJW Call To Action
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Remember - Don’t Leave a TIP with the Taxman!