The top tax free benefits for you and your team to enjoy

Posted on 19th April 2021 by David Rudd

Tax Free Sign

We love helping you and your team with little known tax savings tips.  With this in mind, we have put together our top tax free benefits tips:

There are four key conditions to tax free benefits:

  1. The trivial benefit must cost no more than £50 (inclusive of VAT) and you must keep the receipt
  2. The benefit must not be a reward for services or in any way contractual (think of it as a gift with no strings attached)
  3. The benefit must not be cash or a cash voucher
  4. HMRC knows what directors can be like… so there is a £300 annual cap (ie 6 x £50) for directors of close companies (and other office holders, their close family & households)

If the £50/£300 limit is exceeded (even by a penny) then the whole of the benefit becomes taxable, not just the excess.

The benefit isn’t then taxable (or National insurance-able) income for the employee, so no need to put it through the payroll or include on a P11d.  The employer can get corporation tax relief on the cost and can reclaim VAT.

Some examples for you:

  • Box of chocolates
  • Flowers
  • Meal out
  • Christmas Turkey
  • Gift vouchers (but can’t be vouchers that can be exchanged for cash)

Source material – https://www.gov.uk/expenses-and-benefits-trivial-benefits

 

Finally, a bit of COVID good news

HMRC have also made it very easy for you and your team to claim back a small value for working from home (free of any tax).

All you need to do is follow the below link to see if you are eligible to claim:

https://www.gov.uk/tax-relief-for-employees/working-at-home

NB you or your team must complete this personally. 

 

Need help?

Remember, the Steven Burton & Co team have many decades of experience between us helping business owners just like you with a range of business accounting services.  If you need a sounding board, some advice or a steer in the right direction, then get in touch .

David Rudd

David is an Accountant with over 15 years’ experience in helping a large number of different business owners in numerous sectors from consulting agencies to every area of construction you can think of.

At home dealing with numerous different types of accounting software from Xero to QBO and everything in between.  David is always on the lookout for new technology to help business owners to create more time for themselves and their teams.

With a healthy ambition of never resting on the results of yesterday, David is at his best when working with ambitious business owners who want to improve their businesses for eventual sale.

In his spare time, David is often found cheering on his two boys at football, building Lego (which he pretends is for his boys) or watching the latest TV series on Netflix.

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    2023-10-19
    We moved our accountancy needs to Steven Burton and Co - specifically with David. It’s been night and day compared to our previous provider - we now have a partner who is helping us to develop our business and in a way that means we have long term security. Local, accessible and responsive - everything we need in a company that provides business critical services.
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    The team at Steven Burton & Co have been lovely to work with, helping us with our partnership accounts over the last couple of years. They are always on hand to answer any queries we have and are happy to explain in as much detail as we require. Everyone we have spoken to has been polite, welcoming and extremely knowledgeable and we look forward to continuing to work together as our business grows.
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    2023-05-12
    A truly fantastic accountants. Unlike any other accountants we have had in the past. They are 100 percent on the ball, helpful with fantastic advice. Not just sound accountancy advice but advising the business as a whole in various areas. Strategic quarterly reviews to really delve into the business to make sure profit margins are where they should be, and if they aren’t, they’ll look into improvements that can be made. Nothing is too much and the phone lines are always open for advice. Unlike most accountants their focus isn’t just on completing your annual accounts and not seeing you again for another year. I cannot praise the team enough for all the hard work they put in! They really have shifted our focus onto the aspects of the business that we were perhaps neglecting!
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    The team at Steven Burton are friendly, professional and really get to know their clients so their advice is tailored to suit their individual needs. Cuts through all the jargon and offer clear and timely advice. Would highly recommend.
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