Tax Free Benefits For Employees

As an employer, you may provide your employees with benefits or pay expenses or reimburse them, but these expenses payments are not always taxable.
Below are those expenses which are non taxable.

‘’Trivial’’ benefit in kind –
That is less than £50 in value, not exchange for cash, not a reward for service, not part of their employment contract and not a salary sacrifice.
There is no limit to the number of trivial benefits that an employee can receive. Employers can effectively give these gifts to employees on birthday or any special occasion.
Directors in a close company cannot receive trivial benefits of more than £300
Free or subsidised meals. These are tax free provided:
- The meals are provided on the employer’s premises
- The meals are provided for staff generally
- The meals are provided on a reasonable scale
In house sports facilities. The exemption applies to sports facilities available to all employees and members of their families and households

More non-taxable benefits

Mobile phones and smart phones. There is no charge to tax on one mobile phone provided by your employer, or any line rental or the cost of any private calls. The contract needs to be in the name of the employer.
Bicycles and cycling equipment provided for employees to get to and from work provided all employees are entitled to it.
Workplace parking for cars, bicycles and motor cycles
Christmas parties can also be tax free if they cost £150 or less per head and are open to all employees
Health screening and medical check-ups- Expenses incurred in providing employees with a maximum of one health screening assessment and one medical check up in any year.
Certain childcare arrangements- Places in nurseries or playscheme on premises made available by your employer provided that your employer participates in managing and financing the provision of care
Mileage allowances for work travel in the employee’s own vehicle(not ordinary commuting)
Professional use of home. Payments made by your employer for your reasonable additional household costs if you work at home regularly are exempt from tax. A claim of £4 per week may be made, increasing to £6 per week during Covid.

Disabled people’s cost of travel between home and work. Assistance with the cost of traveling between home and work, or to and from a place where work related training is provided given to people with a substantial and long term disability
Long service awards made to employees as testimonials to make long service where service is not less than 20 years and no similar award has been made within the previous 10 years. The cost of award must not exceed £50 for each year of service
Suggestion awards- The suggestion must relate to the activities carried by your employer and is made outside the scope of normal duties
Employer contributions to an employee’s pension scheme are not taxable on the employee provided they are within certain limits.

Employer-funded or employer-reimbursed training. This exemption covers the costs incurred by your employer of work related training you are reasonably likely to need in your present or likely future jobs with your employer. Courses include Health and safety or leadership skills and includes courses which are provided full time or part time and may be provided internally or by external providers.