This Practical Tax Checklist covers tax-free “staff perks”.

Tax-free benefits or “perks” can be used to incentivise your staff. If you don’t already provide any or some that are listed, you may want to consider them as part of a Salary sacrifice scheme.

At a glance

You can provide an employee with any combination of the following perks completely free of tax and NICs:

  1. One mobile phone or a PDA
  2. Equipment - such as a computers and laptops
  3. A bicycle with safety equipment
  4. Refreshments
  5. Breakfast after cycling in (ceases on 6 April 2013)
  6. Lunch at work
  7. Travelling expenses to temporary workplaces
  8. Subsistence costs when travelling on business
  9. Annual parties and functions
  10. "Trivial" gifts
  11. Round sum overnight allowances
  12. Free vehicle parking at work
  13. Interest-free borrowing beneficial loan
  14. Employer contributions to company or employee’s own pension scheme
  15. Pensions advice to value of £150
  16. Recreational benefits
  17. Childcare vouchers, or a workplace nursery
  18. Training and course fees
  19. £4 per week for homeworking (£3 to 2011/12)
  20. Medical and optical check-ups
  21. A pool car
  22. A low emission car
  23. A low emission van
  24. A van for commuting
  25. A personal numberplate
  26. Relocation expenses
  27. Reimbursement of travel costs when coming to work in the UK
  28. £2,000 of shares

Checklist

Perk Key rules

Covered in:

Practical Tax Guide

Mobile phone or PDA

One per household. Contract must be in employer's name. Unlimited calls/texts but employer may set limit on use or request contribution for private calls.

Mobile phones & devices
Working from home

Tablet or laptop If justified for work purposes as necessary for employee to perform his job properly. Working from home
Computer or MAC As tablet or laptop. Working from home
Bicycle & equipment Providing employee uses it for work/getting to and from work. Employer can reclaim VAT and obtain capital allowances on cost Employee travel
Refreshments May be provided on a reasonable scale in working hours Subsistence
Breakfast for cyclists Up to six free breakfast on different cycle to work days (exemption removed from 6 April 2013) Subsistence
Lunch at work

Works' "canteen" (can be a sandwich trolley). On employer's premises, available to all employees.

Note restriction: see Salary sacrifice schemes from 2011/12

Subsistence
Travelling expenses to temporary workplaces

 Daily travel may be paid by the employer

 Travel
Subsistence

May be reimbursed when incurred during the course of business travel.

Subsistence

 

Parties Cost to employer of £150 (inc. VAT) per year. Parties and gifts
Trivial gifts/gifts from third parties These include edible gifts at Christmas, or flowers. Third-party gifts must not exceed £250 (inc VAT) Parties and gifts
Round sum allowances To reimburse incidental costs when travelling on business. £5 per night in UK, £10 per night abroad. Employee travel
Parking At or near employer's workplace Employee travel
Cheap loan Up to £5,000 p.a. (£10,000 from 2014/15) no tax charge. Tax-efficient remuneration
Pension contributions Employer can make contributions on employee's behalf. Pensions
Pensions advice An employer can give up to £150 of free advice on pensions to an employee Minor benefits
Recreational and sporting benefits Free or subsidised membership of employer facility or one shared with other employers. Recreational benefits
Childcare vouchers £55 per week; restriction from 2011/12 for new schemes for higher earners.

Salary sacrifice schemes

Childcare and childcare vouchers

Training and course fees

Tax free if employer provides for job-related training. Not tax deduction if employee incurs cost.

Training and course fees
£3 (£4 for 2012/13) per week homeworking or homeworking expenses For employees who have a home working arrangement. Alternatively, employer may reimburse actual expenses. Working from home
Medical and optical check-ups General check-ups as part of employer policy. Medical check-ups
A pool car Providing car not parked at employee's home, or provided for sole use. Pool cars
An electric car or van Until 2014/15 Company cars
A van May be provided for work, and just used for ordinary commuting. Company vans
A personalised numberplate May be included with a company car Company cars
Relocation expenses Up to £8,000 may be reimbursed   Travel
Reimbursement of travel costs when coming to work in the UK For non-UK-domiciled individuals to encourage them to come to the UK    Travel
£2,000 of shares A share award of £2,000 worth of the employer company's shares may be given tax-free to any employee shareholder who qualifies under s 205A ERA 1996  Employee Shareholder status


Small print

Some benefits are no longer tax-free from 2011/12 if they form part of a new Salary sacrifice scheme.