Tax Tips > Benefits in Kind

  • Car Fuel Benefit. This is the tax charge when employers pay for your private petrol. It may be beneficial if you paid your own private fuel and save the tax on the benefit. Call us and we will compute the savings for you.
  • Low interest loans provided by employers  Providing you are not a director, it may be possible for a company to lend an employee up to £5,000 with no tax complications. This can be a useful if say the employee needs to buy out his company car to save tax on CO2 based benefit in kind charges.
  • A Company Bus! No tax cost to your employees if you provide a works bus. The minimum seating is for 9 persons. (Used to be 12) This extended tax exemption will apply only to vehicles originally constructed to carry that number of seats. This mirrors a measure in VAT regulations. This will ensure that safety is not compromised by employers cramming a couple of seats into an unsuitable vehicle, such as a people carrier.
  • On your Bike In line with the Governments "green" policy they are increasing the mileage rates that you can claim if you use your Bicycle (20p per mile) or Motor Cyle (24p per mile) for business purposes. The new rates have applied from the 5 April 2002.
  • Consider buying the Company Car and charge your employer for business mileage. No more car or fuel benefit charges. You can charge your mileage at no more than 45p per mile for the first 10,000 business miles in a tax year, 25p per mile over 10,000 miles.
  • If you do charge your employer for business mileage the current rates per mile are 45p per mile for the first 10,000 miles, 25p per mile for over 10,000 miles. An extra tax perk - as the driver you can claim an additional 5p per mile for EACH employee who travels with you on a business journey!
  • Spend less than £150 per head when organising the staff dinner and no benefit in kind charge will apply; this way you will not hand out a perk with a tax bill attached! Make sure you do not exceed the £150 limit as this relief is not an allowance. If you spent say £200 per head, then £200 will be treated as a benefit in kind.
  • Provide mobile phones tax free to employees. This has applied since the 5 April 1999. Make sure the contract for the phone is between the employer and the phone company. If the contract is between the employee and the phone company there will be national insurance complications. Also note that the Budget March 2006 has restricted phones to one per employee - no free phones for the rest of the family!
  • Supply meals, available to all staff, from a staff canteen, and it's considered a tax free benefit. If you have no formal canteen facility the Revenue are also considering an allowance of up to 6 cyclist breakfasts, to encourage staff to cycle to work. Perhaps an account at the local cash and carry would be useful?

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