Nichola Ross Martin's Tax Consultancy

At a glance

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

1. A mobile phone
2. A PDA (Blackberry or similar device)
3. A laptop and/or a PC or Mac
4. A bicycle and safety equipment
5. Refreshments
6. Lunch at work
7. Subsistence costs when travelling on business
8. Annual parties and functions
9. "Trivial" gifts
10. Round sum overnight allowances
11. Free vehicle parking at work
12. Interest-free borrowing in the form of loans of up to £5k
13. Employer contributions to company or employee’s own pension scheme
14. Recreational benefits
15. Childcare vouchers, or a workplace nursery
16. Training and course fees
17. £3 per week for homeworking
18. Medical and optical check-ups
19. A pool car
20. A low emission car
21. A low emission van
22. A van for commuting
23. 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. Note restriction: see Salary sacrifice schemes from 2011/12	Subsistence
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. no tax charge.	Tax-efficient remuneration
Pension contributions	Employer can make contributions on employee's behalf.	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; 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 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	From 2010/11 to 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

Small print

Som benefits will not be tax-free from 2011/12 if they form part of a new Salary sacrifice scheme.