Employment taxation can also be an area of complexity and confusion if not managed well.
Employee benefits in kind have long been a game of cat and mouse between the employer and HMRC. Increasing red tape has skewed the rules in favour of HMRC and taxable benefits have been reported annually on a P11D employee benefit tax return. This is due to change and employee benefits will be reporting through the PAYE system which will affect many business’s cashflow.
In addition to dealing expense and benefit reporting, it is important, as business owners or managers, that you are aware of the other opportunities available to incentivise and reward key employees; many specifically designed to provide a tax incentive for small businesses to incentivise employees. In addition there are a range of non-taxable benefits and it is important that businesses due not incur unnecessary additional costs.
There are tax reliefs and tax pitfalls to be aware of. For example a shadow national insurance scheme may be required where the employee is working in the UK for an overseas employee not subject to PAYE. It is also possible for relief to be claimed from UK tax for some employment responsibilities carried out overseas.
At Johnsons we advise clients on the increasing bureaucracy of tax compliance whilst supporting business manage their financial affairs day to day.
The experienced Johnsons team can help you navigate the complexity of the taxation benefits of remuneration planning. In addition, for many entrepreneurs including those where family members work together in a new business, timely advice can help optimise company structure, remuneration planning and related tax efficiencies.
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