We reveal Taxman’s ‘best-kept secret’
Mobile phones, bicycles, child care and medical check-ups are among the tax-free benefits, together with salary sacrifice schemes, we recommend businesses consider as ways of rewarding their employees.
John Griffin, Partner
The exemption on trivial benefits put in place by HMRC since April 2016 means that bosses can offer small perks to staff without either party having to pay tax or National Insurance, and employers can even claim tax relief on the costs of such perks.
Partner John Griffin said: “Trivial benefits together with salary sacrifice schemes are HMRC's best kept secret, as they allow employers to reward employees with benefits, such as child-care vouchers or mobile phones, exchange for part of their salary, but without having to pay National Insurance Contributions on those benefits.”
The list of tax-free benefits available includes free mobile phones, health screening and medical check-ups, cycling to work schemes, meal vouchers, pension services, training and retraining for work purposes, public transport subsidies, certain travel expenses and even awards for long service.
“Many employers don't even know such schemes exist,” John continued, “or are simply unaware of how they should be put into practice, but they can have a significant impact on staff morale, and with professional advice can be set up very swiftly, to everyone's benefit.”
A guide to the types of salary sacrifice schemes on offer from HMRC is available to view here: https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye
John concluded, “If you are uncertain about any of these rules, or any other financial matters, you should speak to a tax professional for more information.”