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

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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