B

    An alternative tax-efficient way to reward loyal staff

    The tax legislation includes an exemption for staff long-service awards, but the qualifying conditions are tough and the tax-free reward isn’t generous. Is there a better alternative?

    Corporation tax - Special situations - Close companies - Implications of close company status - Benefits - 15960

    Where a company provides a benefit to a participator which would be treated as a benefit in kind (¶27250) if provided to an employee or director, it is treated as a distribution. This rule does...

    Income tax - Employment income - Earnings - Regular payments - Scope - Value of remuneration - 26400

    If an employee accepts a reduction in pay in return for a benefit in kind, the unreduced pay will still be liable to tax. -Heaton v Bell [1969] For optional remuneration arrangements, including salary...

    Income tax - Employment income - Expenses and benefits - II. Benefits in kind - General principles - 27250

    A benefit in kind (referred to in this section as a benefit) is a payment made other than in cash to an employee or director by reason of the employment. Certain minor benefits, which are available to...

    Income tax - Employment income - Expenses and benefits - II. Benefits in kind - Non-taxable benefits - Equipment and communication - Home internet access - 27327

    The tax status of the provision of internet access at the employee's home for work purposes depends on the nature of the arrangements with the provider, and is summarised in the table below....

    Income tax - Employment income - Expenses and benefits - II. Benefits in kind - Taxable benefits - Vouchers and credit cards - Vouchers and credit tokens - 27525

    Unless exempt, when any employee (or a family member (¶27255)) receives vouchers or credit tokens, an assessable benefit arises. A voucher is defined as any voucher, stamp or similar document,...

    Income tax - Employment income - Expenses and benefits - II. Benefits in kind - Taxable benefits - Vehicles - c. Company vans - Provision of van - 27770

    The cash equivalent of the van benefit for 2019/20 is £3,430 (2018/19: £3,350). The amount of the cash equivalent is reduced where the van is either unavailable (¶27695) or is a shared van....

    Income tax - State benefits and pensions - Pension income and state benefits - Income from pensions - Other pensions - b. Chargeable pension income - Benefits in kind - 30100

    Unless the benefit was first provided before 6 April 1998, employers are required to report the provision of post-retirement benefits in kind exceeding £100 per annum (such as medical insurance) which...

    PAYE and NIC - Pay as you earn - PAYE deductions - PAYE codes - Letter - Special codes - 40385

    The following codes operate in a different way. Letter Meaning Situation where normally used 0T Tax to be deducted in the order of basic rate, higher rate, then additional rate, with no allowances Allowances...

    PAYE and NIC - Pay as you earn - Other payments and deductions - 40905

    Employers often remunerate their employees by way of benefits in kind. In addition, an employer is required to make certain payments in compliance with state-imposed obligations.