Tax Busting Tips - Part Three.

There are so many things that could affect your tax bill. Not all of these will be relevant to you but to help you get to grips with them we have created a list of nearly 100 things that you should think about, or discuss with your accountant in the run up to the Self-Assessment deadline. 

Below you will find tips 27-37 which relate to employees, remember, if you are a director of you own limited company then this includes you. 

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27. Have you got a staff suggestion scheme? This allows amounts up to £5,000 to be paid tax free to your employees for suggestions they make which are outside the scope of their normal duties.

28. Have you got any employees who have worked for you for more than 20 years? You can give them a tax free long service award worth £50 for every year of service, as long as the gift is not in the form of cash or vouchers.

29. If your PAYE payments to the revenue are less than £1,500 per month you can pay quarterly rather than monthly to help your cash-flow.

30. If you have people who work mainly for you on a self- employed basis, are you sure they should be classified as self-employed? Getting this wrong can cost a fortune.

31. When you take on a new employee make sure you either get a P45 from them or get them to complete the Starter Checklist from HMRC. You will need this to ensure you employee receives the right level of allowances against their wages. This is particularly important for part-time employees, and family members who work for you.

32. If your employees belong to professional organisations they can claim tax relief on their subscriptions, or you can pay their professional subscriptions on their behalf, as long as the organisation is approved by the Revenue.

33. Paying bonuses half yearly or yearly rather than monthly can save on employees National Insurances (but not for directors).

34. If your company makes contributions into a registered pension scheme for you rather than you paying contributions out of your net income, you and the company both save national insurance on those contributions.

35. When you take on a new employee consider paying their removal expenses if they need to move to take up the job. The first £8,000 paid for one move is tax free, where receipts for the costs are provided.

36. When an employment contract is terminated there are certain circumstances in which termination payments of up to £30,000 can be paid tax free.

37. Consider setting up an approved share scheme to allow your employees to buy shares in your company at a favourable price, which will encourage them to be more involved in the business. The employees can also benefit from low tax rates when they sell the shares.

The next part will include tips relating to benefits. If you feel you need help to get the most from your self-assesment then all you need to do is fill in this handy form.