Staff Paid Tax Free?
Posted on 19th December 2016 at 15:41
Why not give your staff tax free benefits and also claim 20% tax relief on your profits?
For the tax year 2016-17 new rules have been introduced to the "Trivial Benefits". The implications of the new rule is that no income tax charge emerges on an employees benefit. Although this will only occur if:
Costs don't exceed £50 to provide the benefit
The benefit is not cash or a cash voucher
Salary sacrifice arrangements are not the reason for the benefit
The benefit isn't given purely on an employees success or achievement on a service
Further to this for directors it is slightly different. This is targeting smaller companies so they have no advantage. There is an annual limit of £300 for directors who wish to receive a benefit, any more than this then it will be taxed as normal.
You must be careful as a business when giving out benefits. Too many non contractual benefits given within a tax year to an employee can result in making it more of a contractual benefit, meaning tax will be charged.
Tagged as: tax
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