Ten tax benefits which really add up
As one well-known supermarket chain puts it, ‘Every Little Helps’. Chartered Tax Adviser Jen Lawton explains how small wins can add up for her business clients.
Inevitably, clients are often looking for me to wave a magic wand and bring them a sizeable tax saving. The reality can be a little more mundane. Often it’s a question of checking that a number of smaller measures are in place, which together add up to something bigger.
Here’s my Top Ten list of easy wins:
Exemption for ‘trivial’ benefits
If you give an employee a benefit which is up to £50 in value, but not a cash gift, it no longer needs to feature on a P11D. A great way of saying thank you to someone or congratulating them on a birthday, marriage or having a baby. You can even treat yourself if you’re running your own business.
Do you have an employee who’s had 20 years of service? You can reward them for their loyalty with a gift of up to £50 tax free, but not cash, for each year they’ve been with you.
Working from home
You can pay yourself £4 a week for working from home, without the need to provide evidence to HMRC. That’s a straightforward £200 a year.
It’s possible to purchase a decent bike through your company if someone is using it to commute to work.
There’s still a tax advantage here, although it’s a more complicated area and will depend on earnings. That’s a topic for another blog!
You can provide parking at a place of work without it being classed as a benefit in kind. An employer is also able to take a contract space.
Many vans today are not that distinct from cars. If you choose to buy one, it’s actually better from a tax perspective.
You’re probably aware of the 45p a mile that can be claimed up to 10,000 miles. But did you realise there’s a 5p bonus for taking a passenger?
Take out a loan
Borrow up to £10,000 from your company without any benefit-in-kind implications. A typical loan might be for a season ticket. As long as it’s repaid within nine months of the year end, there’s no problem.
You can take advantage of an £8,000 tax-free relocation allowance. The only proviso is that the relocation is due to employment and that the money covers actual costs.