Tax Free Employee Benefits

Looking for a way to motivate employees? Have a look through these tax-free benefits you can offer your staff as a way of rewarding them for their hard work.

(2-minute read)

We will cover:

• Tax free ways to reward employees

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Tax free benefits for employees

There are a number of tax exempt rewards or ‘perks’ you can offer to employees.

Employers can use these options to set up a tax efficient remuneration strategy.

You can tailor any of these options which will provide different benefits of value to employees, completely free of tax and National Insurance Contributions (NICs):

• A mobile phone or a Personal Digital Assistant (PDA)

• Equipment e.g. computers, laptops, smart phones

• A bicycle and safety equipment

• Refreshments

• Breakfast for early starters if available to all staff (see Lunch)

• Lunch and refreshments while at work

• Travel expenses: to temporary workplaces

• Travel expenses: late night working/car sharing failure

• Subsistence costs when travelling on business

• Annual parties and functions

• ‘Trivial’ gifts & benefits (up to £50 per gift, £300 per year)

• Round sum overnight allowances

• Free vehicle parking at work

• Interest-free borrowing beneficial loan (up to £10,000)

• Employer contributions to company or employee’s own pension scheme

• Pensions advice to the value of £500

• Recreational benefits

• Childcare vouchers, or a workplace nursery

• Training and course fees

• £6 per week for homeworking

• Medical and optical check-ups

• A pool car

• Low benefit-cost on low emission car

• Low benefit-cost on low emission van

• A van for commuting

• A personal numberplate

• Relocation expenses

• Reimbursement of travel costs when coming to work in the UK

• Capital growth in your company via EMI options

• Staff Suggestion Schemes: £25 to £5,000

• Legal fees: employees no longer pay tax on legal support from their employer 

• Workplace charging facilities for electric vehicles (from 6 April 2018)

• Job-related accommodation

• Long service awards for at least 20 years service: max £50 per year of service  

• Life assurance policy premiums that provide an employee with death benefits 

• Premiums paid to a QROPS that provides retirement benefits are tax-exempt benefits

This is a good checklist, but if you require any further information on any other of the above perks please contact us. It is important that you read the details so that you do not fall foul of any tax traps.

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Kind regards Ilyas