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  • Tax - Company van agreement
    Company van agreementUnlike company cars, you can provide your employees with a company van for business use which includes commuting to and from the workplace. To ensure no benefit arises, any private use must be insignificant.VansIf your company has the kind of trade that requires you and your employees to attend customers with tools and equipment, it is likely that you will have vans owned by the company that are used for these purposes. HMRC's online guidance implies that if the van is used for commuting...
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  • Tax - Employee provision of home telephone policy
    Employee - provision of home telephone policyIf one or more of your employees work from home and need a landline phone for work purposes, you might agree to provide the equipment and pay the rent and call charges. HMRC may argue that a benefit in kind charge arises because there is bound to be private use. Part of an effective counter argument is to have a home telephone policy for your employees.business requirementWhere you pay directly for a telephone in your employee's home, they will have to pay tax and...
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  • Tax - Payrolling benefits in kind letter to employee
    Payrolling benefits in kind letter to employeeHMRC usually collects tax on benefits by adjusting an employee's code number so that extra tax is collected, through the PAYE system, each time they are paid salary. Payrolling achieves the same result but without intervention by HMRC. More accuratePayrolling involves you adding a notional amount to your employee's taxable pay each time you pay them. Because you determine the taxable amount based on up-to-date information about the benefits you provide your employees,...
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  • Tax - Mobile phone declaration
    Mobile phone declarationThe old rule was that you could have as many mobile phones as you liked, tax and NI free. Now it's down to one per employee. If you have more than one, you will need to declare which one is to be your tax-exempt phone.Choose your exempt phoneThe tax exemption for employees who are provided with a mobile phone changed on 6 April 2006. Directors/employees provided with more than one new phone by their company will need to consider which is to be the "exempt" phone and which the "taxable"...
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  • Tax - Staff suggestion scheme rules
    Staff suggestion scheme rulesYou might want to reward your employees for certain ideas that contribute to the success of your business. Previously by concession, this is now a statutory exemption. However, there are conditions you'll have to meet.Financially beneficialA little-known way of giving employees tax and NI free cash is through a staff suggestion scheme. The scheme needs to be formally set up, but that doesn't take much doing. You tell the staff that they will receive a small payment in return for...
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  • Tax - Salary sacrifice policy
    Salary sacrifice policyIf you want to implement a salary sacrifice scheme in your company, make sure you insert the relevant policy in your staff handbook. Scheme particularsIncluding a Salary Sacrifice Policy in your staff handbook is important both to convey the details of the scheme and to point out any drawbacks. For example, a sacrifice requires a permanent alteration to the employment contract and could have an effect on borrowing capacity for mortgages and credit cards as well as possibly interfering...
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  • Tax - Staff suggestion scheme record
    Staff suggestion scheme recordTax rules permit employers to pay employees a tax and NI-free sum for suggestions to improve the busines. Keep a separate record of such payments to help justify the tax and NI treatment should HMRC make enquiries.Log the ideasThe really clever bit of a staff suggestion scheme is that even if you get snowed under with suggestions, you get to pick the ideas to be used or rewarded so you decide who gets the money. HMRC, however, will want to know all about the tax-free amounts you...
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  • Tax - Electronic devices policy
    Electronic devices policyWhen removing the Home Computer Initiative back in 2006, HMRC accidentally opened the door to charging tax on private use of any electronic device, such as a laptop or tablet, provided to employees by their company. How can you prevent a tax charge from arising?Computer-related equipmentTablets and laptops come within the normal rules for computers. HMRC's guidance says that for computers provided to employees by their company to be exempt from benefit-in-kind charges, "the sole reason...
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  • Tax - Salary sacrifice letter to employee
    Salary sacrifice letter to employeeWhere you enter into a salary sacrifice arrangement with an employee it will only be effective for tax and NI purposes where you have notified them of the consequences. Benefit in kind instead of salarySince 6 April 2017 most salary sacrifice arrangements cease to offer tax or NI savings. However, some benefits can still be used to save tax and NI. They are:payments into pension schemesemployer-provided pensions advicechildcare vouchers, workplace nurseries and directly contracted...
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