CKLG BLOG

Employee Share Schemes and Benefits

21.03.2019

Business

Share Schemes

Employee shares schemes play an important role in incentivising and retaining valuable employees.  Shares can be issued under a formal share scheme, which may be HMRC approved and benefit from tax advantages, or via a more formal arrangement.

We can advise on the type of scheme that would be most appropriate for each employer and the tax and reporting considerations including:
 

• Corporation Tax deductions for associated costs
• Annual employer reporting to HMRC
• Potential Income tax and National Insurance charges.

We can also advise employees on the tax implications of acquiring and selling employee shares and their Self-Assessment tax return reporting obligations.

Employee Benefits 

We can advise on the tax and National Insurance implications of employee benefit packages. Examples of commonly offered benefits include:
 

• Company cars and fuel
• Company vans and fuel 
• Private medical or dental insurance
• Employee Loans 

The rules concerning the valuation of taxable benefits have become more complicated following the introduction of the Optional Remuneration Arrangement rules on 6 April 2017.

Business owners are often bound to increase employee salaries on a yearly basis.  But one alternative is to offer an additional benefit rather than cash.  We can advise on the opportunity to provide tax-free benefits including:

• Trivial non-cash benefits 
• Annual staff parties
• Mobile phones
• Pension contributions and pension advice
• Health screening
• Additional home working costs
• Relocation expenses

We also offer P11D preparation services to report benefits in kind and Class 1A National
Insurance liabilities to HMRC.