There are many benefits you can offer your employees, some more tax-efficient than others. But many of them will serve different purposes within your business.
With the benefits-in-kind July deadline fast approaching, it’s as good a time as ever to assess and understand the various options you have available to you and your business.
In this blog, we’ll explore what kinds of benefits you can offer, and how these can aid you and your employees, as well as keep you tax efficient.
A great way to offer benefits to your staff is offering family support. Whether that’s on-site childcare for families who can’t afford a nanny, extended periods of leave for bereavement, adoption, or just standard parental leave, these are all benefits that can really impact the morale of your staff.
The pandemic changed the business landscape for everyone, not least because of the massive shift towards flexible working.
Working from home is a real benefit for many employees, freeing up their time from commuting, and giving them the flexibility to manage their own schedules. For some workplaces, this isn’t possible – hospitality, for example – but for most, there is always something that can be done to allow this more progressive style of working to prosper.
It’s no longer a taboo subject, so all businesses should understand the importance of their staff’s health.
Whether that’s giving them access to counselling sessions, organising a proper talk from a guest speaker, or changing staff hours, these are all things that can improve your team’s mental health.
Cars and electric cars
Making sure your business is tax efficient goes hand in hand with offering benefits that work for you and your staff. One of the oldest of these is the company car.
Providing a car to your staff on either a lease basis or via salary sacrifice will mean that both parties make savings on National Insurance contributions.
Your staff will be able to benefit from reducing their tax liabilities and divert some of their salaries to pay for the car.
Further to that, the advancement of electric vehicles opens up more options for you and your business through a reduced benefit-in-kind tax rate.
From April 2020, HMRC calculates the company car taxable benefit based on the electric range of the vehicle, and the level of CO2 emissions the car emits.
And even better, If your car is completely electric (it has emissions of 0g/km) a 100% first-year allowance can be claimed on the purchase price of the new vehicle.
A social gathering is a great way to get your staff to bond with each other. A team-building day, trips out, or the occasional Friday lunchtime pub trip are all classic examples of spending the company money on something a bit more fun.
While these won’t be tax-exempt, they will save your staff from coughing up any of their own cash, and make them feel part of something bigger than themselves.
Parties, however, are different. Who doesn’t love an end of year party? Well, it’s a great way to provide some more tax-exempt fun for you and your staff, under the right conditions.
HMRC says a party or social function can be exempt if it’s:
- open to all employees
- an annual occasion
- costs £150 or less per person.
Have some more questions?
Benefits are an important way to highlight to your staff that you care about them and that you want them to succeed in their role.
Some of these benefits aren’t always going to be the most tax-efficient, so may not be appropriate for you if you’re on a budget.
We’re happy to talk to you about anything we’ve discussed in this blog. Get in touch with us today, and we’ll talk you through it.