This Practical Tax Checklist covers tax-free “staff perks”.
Tax-free benefits in kind, 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:
- A mobile phone
- A PDA (Blackberry or similar device)
- A laptop and/or a PC or Mac
- A bicycle and safety equipment
- Refreshments
- Lunch at work
- Subsistence costs when travelling on business
- Annual parties and functions
- "Trivial" gifts
- Round sum overnight allowances
- Free vehicle parking at work
- Interest-free borrowing in the form of loans of up to £5k
- Employer contributions to company or employee’s own pension scheme
- Recreational benefits
- Up to £55 per week in childcare vouchers, or a workplace nursery
- Training and course fees
- £3 per week for homeworking
- Medical and optical check-ups
- A pool car
- A van for commuting
- A personal numberplate
Checklist
| Perk | Key rules |
Covered in: Practical Tax Guide |
| Mobile phone |
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. |
Working from home / Salary sacrifice schemes |
| PDA | If justified for work purposes as necessary for employee to perform his job properly. | Working from home |
| Computer/laptop/MAC | As PDA. | 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 |
| Lunch at work |
Works' "canteen" (can be a sandwich trolley). On employer's premises, available to all employees. |
Subsistence |
| Subsistence |
May be reimbursed when incurred during the course of business travel. |
Subsistence |
| Parties | Cost to employer of £150 per year. See Practical Tax Guide to parties & gifts | Parties and gifts |
| Trivial gifts/gifts from third parties | Trivial appears to mean small, it includes 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. no tax charge. | Tax-efficient remuneration |
| Pension contributions | Employer can make contributions on employee's behalf. Especially beneficial when new rules apply in 2011. |
Pensions |
| Recreational and sporting benefits | Free or subsidised membership of employer facility or one shared with other employers. | Recreational benefits |
| Childcare vouchers | £55 per week. May affect tax credits if part of a salary sacrifice arrangement | Salary sacrifice schemes |
| 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 per week homeworking | 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. | Company cars |
| A van | May be provided for work, and just used for ordinary commuting. | Company vans (guide coming soon) |
| A personalised numberplate | May be included with a company car | Company cars |
