Ascentis TV – July Tax Tips
In the latest edition of Ascentis Tax Tips, the focus is on the strategic provision of additional benefits alongside employee remuneration packages, aiming to attract and retain top talent. Employers are increasingly exploring diverse benefits to enhance their offerings, and this month’s tips cover various aspects, including mobile phones, the cycle-to-work scheme, workplace meals, staff entertainment, non-cash vouchers, and auto-enrollment pension schemes.
1. Mobile Phones: Providing employees with company mobile phones under the employer’s contract is not a taxable benefit. However, complexities may arise if the employee has their contract and seeks reimbursement for business-related calls. To simplify both administration and tax efficiency, it’s recommended for the employer to own the contract.
2. Cycle-to-Work Scheme: Previously covered in detail in episode 8 of Ascentis TV, the cycle-to-work scheme remains a valuable benefit. Employees can enjoy tax savings while promoting a healthy lifestyle.
3. Workplace Meals: Offering free or subsidised meals within the workplace, whether for working lunches or breakfasts, can be a non-taxable benefit. The key is to ensure all employees have equal opportunities to avail themselves of these benefits, preventing any tax implications.
4. Staff Entertainment: For events such as summer barbecues or Christmas parties, employers can spend up to £150 per head (including VAT) without incurring taxable benefits. However, exceeding this limit triggers tax implications, necessitating careful consideration of the cost per head.
5. Non-Cash Vouchers: To incentivise employees without incurring taxable benefits, employers can provide non-cash vouchers or benefits up to £50 in value. This includes gifts for special occasions or even covering the cost of Friday drinks, as long as it stays within the prescribed limit.
6. PSA Settlement Agreement: In cases where lavish events surpass the £150 per head limit, employers can enter into a PSA (Payroll Settlement Agreement) with HMRC. While this means employers cover the tax and national insurance costs on behalf of employees, it spares employees from individually paying taxes on the benefits received.
7. Auto-Enrollment Pension Schemes: Employers are reminded to revisit their auto-enrollment pension schemes. With recent increases in both employee and employer national insurance rates, it’s advisable to set up these schemes on a salary sacrifice basis. This tax-efficient approach ensures that pension contributions are deducted before tax and national insurance calculations, benefiting both employees and employers.
In conclusion, the July 22 ATV Tax Tips provide valuable insights into optimising benefits, simplifying administration, and enhancing tax efficiency for both employers and employees. Staying informed and strategically implementing these tips can contribute to a more attractive and competitive remuneration package while navigating the complexities of the tax landscape.
About Ascentis TV
Ascentis TV is our update show that gives business leaders updates and insights on various growth-related topics such as taxation, financial management, people management and much more. The show features our amazing experts from Ascentis who have many years of experience in helping businesses grow successfully and helping individuals achieve their personal vision of success.
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