Providing benefits and covering expenses for employees is a common part of running a business, but it is important to understand the tax implications. A benefit that appears simple or low value could create unexpected reporting obligations or result in additional tax and National Insurance
Employees may be entitled to tax relief on certain professional fees and subscriptions that they pay personally. The relief is available where membership of a professional body is required for an individual to carry out their duties, or where annual subscriptions are paid to an HMRC-approved
When employers provide mobile phones to employees, it is important to understand the tax treatment that applies to both the device and any related costs. The rules also differ where employers reimburse employees for their personal mobile phone expenses.
HMRC provides a specific exemption where an
Employees may receive a taxable benefit where an employer provides a loan that is interest-free or charged at a rate below HMRC’s official interest rate (currently 3.75%). The benefit arises from the difference between any interest actually paid by the employee and the interest that would have been
There is no requirement to report certain travel and subsistence expenses where an exemption applies. The travel and subsistence benefits that do not need to be reported include reimbursed costs to employees covering business travel. Subsistence includes meals and any other necessary costs of
The range of benefits that can be provided tax-free by an employer is relatively limited, but there are several common exemptions that apply where certain conditions are met.
Meals provided in a staff canteen can be exempt where they are offered to all employees on a reasonable scale and are not
Employers looking to provide staff with small gifts or seasonal tokens of appreciation should remember the rules for tax-free trivial benefits.
A benefit can qualify as a trivial benefit where all of the following conditions are met:
the benefit costs £50 or less;
it is not cash or a cash
Employees who receive fuel from their employer for private use in a company car can avoid paying the car fuel benefit charge by reimbursing the full cost of the private fuel. This process, known as "making good," requires the employee to repay the employer for private fuel no later than 6
The rules on claiming tax relief for working from home are changing for the new 2026-27 tax year. In most cases, employees will no longer be able to claim relief for homeworking, although claims can still be made for the previous four tax years. The removal of the tax relief was announced in the
While company cars often come with tax implications, there are specific situations where the associated benefits may be exempt. There are circumstances where it can be possible to offer employees car benefits that are exempt from tax.
Exempt expenses and benefits include the