Life Planning, Tax Planning, Asset Management & Consultancy for Private and Corporate Clients
Taxation of Pay
It is worth taking a little trouble to understand the main features of the taxation of pay. Breaking the rules even inadvertently can lead to time-consuming investigations, as well as potentially expensive penalties. And on a more positive note, there could be scope to remunerate employees – and possibly yourself - in ways that may be more tax efficient than straight-forward salary.
Setting up efficient regimes for record keeping for all PAYE and related matters is essential. For example, you can avoid many difficulties with travelling and other expenses simply by understanding the rules and keeping good records.
Benefits in kind as well as shares schemes can open up the possibility of rewarding employees tax efficiently, although you need to know how best to integrate them into your pay structure so that they are fair as well as fiscally effective.
Making the most of fringe benefits
Fringe benefits are often used to provide employees and company owner directors with tax efficient ways of receiving remuneration. The rules taxing fringe benefits have changed over the years and as a result, some perks that were tax efficient in the past are no longer attractive, while others have become worth considering.
Levels and bases of, and reliefs from, taxation are subject to change and their value depends on individual circumstances.
This publication is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication This publication represents our understanding of law and HM Revenue & Customs practice as at 31 January 2019.