Save TAX
22 January 2005, 02:03 PM
#1
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Save TAX
I was looking at the savings on getting my guys a mobile phone.
This might be of some use to you. Get your company to provide you with a mob phone.
Or a bike to ride to work
Employers can provide a phone for an employee and pay the bills. The cost of the phone and the bills are then taken out of the employee's wages. Because these payments are taken from gross earnings, before deductions - tax and NI bills are cut for the worker and the boss saves on NI, or passes the saving on as a pay rise.
The phone doesn’t have to be used for work. The worker’s family can also benefit as the tax break lets that person have two phones and a three more for family members. The money saved depends on big the phone bills are.
High earners taking five phones could quite easily save £1,000 a year. They’ll save at least 33 % off the whole package and anyone earning £31,000 or more saves 41%.
Bosses can provide people with computer equipment, up to the value of £2,500. (lease costs must be no more than £500 a year, including VAT) Employers usually lease - rather than buy - the equipment from a supplier running a Government backed Home Computing Initiative scheme, and then leases it on to the employee at no cost to the employer.
The employer then deducts the cost of the lease from the employee's salary. The employee pays no tax or NI on these repayments. The employer still owns the machine but they can sell it for as little as £50 to the worker who then bags a great deal.
Childcare vouchers are free of NI for both employer and employee. However, from 5 April the vouchers will additionally be free of tax, although the value will be capped at £50 a week. This tax break will make a huge difference to the value of the vouchers, especially for higher-rate taxpayers.
The Cycle to Work Initiative saves employees 40-50 % off the cost of bicycles and accessories. The company should buy the bike and lease it to the employee. At the end of the lease period the bike can be bought for the price if a month’s lease.
Companies can also offer free meals and drinks to employees who cycle to work. If the meals are provided on a specially designated ‘cycle-to-work day’, they can be a nice tax-free incentive to employees.
Season-ticket loans to cover the cost of public transport are another benefit. This is tax-free under £5,000 - and the loan can be used for other purposes as long as company policy allows.
Changes to the Financial Services Authority regulations mean employers can offer financial information and advice up to a value of £150 per person tax-free for the employee.
The VAT-inclusive cost of an annual staff party can now be tax-free up to £150 per employee. Employees receiving gifts from suppliers at Christmas not be taxed unless the VAT-inclusive value of the gift exceeds £250.
This might be of some use to you. Get your company to provide you with a mob phone.
Or a bike to ride to work
Employers can provide a phone for an employee and pay the bills. The cost of the phone and the bills are then taken out of the employee's wages. Because these payments are taken from gross earnings, before deductions - tax and NI bills are cut for the worker and the boss saves on NI, or passes the saving on as a pay rise.
The phone doesn’t have to be used for work. The worker’s family can also benefit as the tax break lets that person have two phones and a three more for family members. The money saved depends on big the phone bills are.
High earners taking five phones could quite easily save £1,000 a year. They’ll save at least 33 % off the whole package and anyone earning £31,000 or more saves 41%.
Bosses can provide people with computer equipment, up to the value of £2,500. (lease costs must be no more than £500 a year, including VAT) Employers usually lease - rather than buy - the equipment from a supplier running a Government backed Home Computing Initiative scheme, and then leases it on to the employee at no cost to the employer.
The employer then deducts the cost of the lease from the employee's salary. The employee pays no tax or NI on these repayments. The employer still owns the machine but they can sell it for as little as £50 to the worker who then bags a great deal.
Childcare vouchers are free of NI for both employer and employee. However, from 5 April the vouchers will additionally be free of tax, although the value will be capped at £50 a week. This tax break will make a huge difference to the value of the vouchers, especially for higher-rate taxpayers.
The Cycle to Work Initiative saves employees 40-50 % off the cost of bicycles and accessories. The company should buy the bike and lease it to the employee. At the end of the lease period the bike can be bought for the price if a month’s lease.
Companies can also offer free meals and drinks to employees who cycle to work. If the meals are provided on a specially designated ‘cycle-to-work day’, they can be a nice tax-free incentive to employees.
Season-ticket loans to cover the cost of public transport are another benefit. This is tax-free under £5,000 - and the loan can be used for other purposes as long as company policy allows.
Changes to the Financial Services Authority regulations mean employers can offer financial information and advice up to a value of £150 per person tax-free for the employee.
The VAT-inclusive cost of an annual staff party can now be tax-free up to £150 per employee. Employees receiving gifts from suppliers at Christmas not be taxed unless the VAT-inclusive value of the gift exceeds £250.
22 January 2005, 02:06 PM
#2
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Cheers - the annual rail-card is a little less painful now. I completely forgot about the loan deducted before IT and NI! :
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