Employee Welfare - Our 3 Favourite Tax Tips!
Do you have employees? Do you spend money on employee welfare?
Do you wonder how you can help and motivate them in a tax efficient manner, whilst keeping your business running smoothly and efficiently, especially with respect to their health and welfare?
What are the tax tips to consider when incurring costs on employee welfare, HR and other employee related costs and overheads?
Employee Welfare - Our Three Favourite Tax Tips For Keeping Them Healthy!
Employee Welfare Tip 1 - HR Services
It is very common for businesses to subscribe for a service from which they can obtain HR advice (or advice on legal matters etc) as and when you need it.
This type of expense is fully deductible from the profits for tax purposes.
Employee Welfare Tip 2 - Staff Welfare Services
There are also a wide range of services, providing subscription based employee welfare.
The idea of these services is that the personal needs of employees when they go through difficult personal moments in their lives, are taken care of, meaning they will function more effectively in the workplace.
There is a specific exemption from the Taxman to prevent this sort of service from being treated as a taxable benefit on the employee, making it both a tax efficient employee benefit, and a good thing for all employers who want to care about the welfare of their staff to do!
And as a employment-related cost, the costs of subscribing to these services are fully tax deducible from the employer's business profits.
Employee Welfare Tip 3 - Gym Memberships
Subscriptions for gym or gold clubs whilst they might help improve the health and welfare of employees which are viewed as a business benefit, do not meet the Taxman's condition of this being wholly and exclusively for business.
So if you are a sole trader this will not be tax deductible, and for directors or employees of limited companies there will be a benefit in kind levied upon them (all the cost to limited companies is tax deductible).
Our Employee Welfare Call To Action
Keeping your employees happy and productive is a genuine business concern for all companies, whatever they do or however they are structured.
From the sole trader who is unwell and needs assistance getting better to the large limited company making sure their employees and directors are fully productive, there are a whole host of benefits that the business can purchase.
The Taxman is sympathetic to this dilemma and there are a number of specific exemptions encouraging businesses to spend money helping their staff. But the test as ever with these costs is are they wholly and exlucively for the business to benefit from. If in doubt ask your accountant for their advice!
A number of these services can be purchased by being members of national business organisations as part of membership, and we recommend the Federation Of Small Businesses (The FSB) as being particularly good value for money and extremely comprehensive.
If you know of any other great tax tips relating to employee welfare that can be shared with our readers then let us know via the comments or through LinkedIn.
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Remember - Don’t Leave a TIP with the Taxman!