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Tax free benefits

How to take money from your company is a complicated topic but here are some tax free benefits you can use:

Meals
Provided an employer makes free lunched available to everyone there is no tax on the benefit. This means one person and family companies can have the tax office subsidise their lunchtime sandwich by claiming the cost against profits.

Parking
Paying for a parking space or reimbursing the cost of parking at or near an office is not taxable. This can be a worthwhile benefit if your business is based in a city with high parking charges.

Mileage
Where you use your own car for business you can claim for mileage and its tax free if it falls below the tax office rates.

For cars and vans this is 45p for the first 10,000 miles and then 25p a mile. For motorbikes it’s 24p a mile regardless of the mile. You’re also allows to claim an extra 5p a mile for a passenger, so if for a husband and wife team that’s 50p and 30p a mile.

Bikes
Provided all employees are able to have a bike paid for by the company then both the cost of bike and safety equipment can be provided tax free. And, if you use a bike for business then you can claim 20p a mile.

Taxis
Occasional late nigh taxi’s home are also tax free – late night means after 9pm and occasion means less than 60 times a year.

Medical check ups
Again, if all employees are entitled to annual medical check-ups, they can be paid for by the company without a taxable benefit.

The company can also meet eye check-ups if the employee works at a computer and the cost of prescription glasses for VDU work. But, medical insurance and treatment paid by a company is a taxable benefit.

Small treats
A new exemption was introduced from 6 April 2016, which allows you to have small treats in the form of gift cards.

The items need to cost less than £50 and is capped at £300 a year for a one-person or family company.

Parties
Provided the cost is less than £150 a head in total over the year parties paid for by the company are tax free.

Long service awards
After 20 years of service you can pay a tax free amount which can include cash up to £50 per year.

Image from Flickr by Chris Potter.

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