Cost of living Payment from small employer

Jeremy535897

See https://www.att.org.uk/employers/welcome-employer-focus/tax-free-gifts-employees

I think the "gift" of something to use for work purposes at home may escape tax if done correctly, but that is not going to help with an increase in the cost of living.

Grumpy_chap

Laranja said:

Why shouldn't they, it then gives smaller employers the option to help their staff

What about the staff at bigger employers?
Why shouldn't they be helped also?

Laranja

That would be entirely up to the individual company or employer

Grumpy_chap

Laranja said:

That would be entirely up to the individual company or employer

And it is entirely up to your smaller employer to help their staff also.  Exactly the same rules apply.

jimmo

The Welsh Government did a similar thing for NHS staff and Care workers during Covid  but ended up footing the tax bill as well.
NHS and social care staff to benefit from bonus payment | GOV.WALES.

DoctorStrange

I think you can give 6 X £50 vouchers/store cards tax free under the "incremental benefits" rules

They can't be a reward for performance, nor can they be labelled anything to do with the cost of living, but instead should be a simple gift e.g. birthdays, Christmas etc. - I'm sure you can find some reasons.

Whilst £50 every other month is not as good as £500 upfront I'm sure people will still appreciate it.

sheramber

how many birthdays and Christmases can you have in a year?

from Jeremy's link above

Trivial Benefits in kind Trivial Benefits – You and your employees will benefit if you provide and record them correctly Did you know that the rules on the exemption from tax and NICs for Trivial Benefits apply to the provision for employees of ‘a benefit’? A benefit can be the provision of one item/event, or the provision of a series of items/ events which together constitute a single benefit. Please look at Example D in the Employment Income Manual at EIM21865: Employer D gives an employee a gift card which costs the employer £10 to provide. The employer tops up the gift card on 7 further occasions, at a cost of £10 on each occasion. Although the benefit is topped up on separate occasions, there is a single benefit of the provision of the gift card. The total cost to the employer of providing the benefit over the period of employment is £80. Therefore the benefit is not exempt as a trivial benefit. As you can see, what might appear to be several individual benefits can actually be a single benefit provided over the tax year. This will help you understand what ‘a benefit’ is under the trivial benefit rules

tightauldgit

Laranja said:

As a small company with 25 staff we are looking at giving staff £500 to help with the cost of living. However because of tax and national insurance the amount that gets to the staff is approx 70% as the other 30% goes to the government in tax and national insurance. How can I pay the money so the total goes to the staff or is the government going to put in place an exception to enable these payments to be made tax and NI free.

Is anyone else in the same position

Why would/should employees be able to receive payments from their employer tax-free?

molerat

tightauldgit said:

Laranja said:

As a small company with 25 staff we are looking at giving staff £500 to help with the cost of living. However because of tax and national insurance the amount that gets to the staff is approx 70% as the other 30% goes to the government in tax and national insurance. How can I pay the money so the total goes to the staff or is the government going to put in place an exception to enable these payments to be made tax and NI free.

Is anyone else in the same position

Why would/should employees be able to receive payments from their employer tax-free?

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