Tip-Top Tax Tip 4 – Rewarding staff and saving tax

Welcome to our video series of Tip-Top Tax Tips for 2015. We’ll be giving you 5 of our top tips to cut your tax bill in the year ended 5 April 2016. In Part 4, we’ll look at tax-efficient ways to reward you and your staff.

You can watch it here, or read all about it below the video.

Hi – it’s Jon Davies here with another tax saving tip for you. Today is the 4th in our series of 5 Tip-Top Tax Tips for 2015.

Today I want to talk about rewarding staff. You see, you pay staff a salary and you get tax relief from that but, of course, there’s tax involved for the employee – PAYE and National insurance. For you as an employer, there’s Employers National Insurance.

But there are some things you can do for your staff which give you tax relief and doesn’t have any tax for them either.

The first one is pensions – they are a really tax-efficient way of rewarding your staff. You may be aware of the auto enrolment scheme which has already hit many big businesses and will be compulsory for of all businesses by 2017. You will be required to provide a pension scheme for employees because the government is very aware that, ultimately, we’re all getting older and the state can’t fund everyone’s full pensions. What that means is there is tax relief on pensions to encourage you, and it’s a really good way of rewarding staff.

The second one is mobile phones – you can give each of your staff one mobile phone tax free. This can also stretch to a smart phone, or even an iPad.

Some others include:

  • Subsidising certain forms of transport to and from work – including bus fares
  • Providing workplace nurseries and crèches
  • Sporting and recreational facilities
  • Health checks
  • Car parking
  • Paying relocation expenses

Of course one tax-efficient thing that many of us do is take staff out sometimes. You can pay for staff parties up to £150 per person each year and get tax relief on it.

You can also give cash prizes for staff rewards, for example if you’ve got a suggestion box. That’s tax free.

And, of course, you can pay mileage if someone does a business trip in a car. But did you know you can even do this if they cycle?

All in all, there are a lot of ways to reward staff where you get tax relief and the team don’t get taxed, so everyone is happy.

I hope you found that useful and I’ll be back soon with the 5th of our Tip-Top Tax Tips for 2015. See you soon.

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Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss business tax, please give us a ring on 0151 380 3800 or drop us an email at [email protected].

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