Everywhere you look taxes are increasing and tax is becoming an increasing burden on business owners. But there are still a few small (and one or two not so small) things a company can pay for for you without you being taxed on them. Here’s a short list of examples of things your company can pay for (and reduce its Corporation Tax) without you being taxed on them yourself:
1. Mobile Phones
- Provision: One mobile phone provided to a director is exempt from tax.
- Conditions: The phone must be provided by the company and the contract held in the company’s name.
2. Employer Pension Contributions
- Provision: Contributions made by the employer to an approved pension scheme.
- Conditions: Contributions must be within the annual allowance limits (currently £60k) but annual allowances for three previous years might also be available.
3. Bicycles and Cycling Safety Equipment
- Provision: Provided under the Cycle to Work scheme.
- Conditions: The bicycle must be used mainly for commuting to work and business-related travel.
4. Business Mileage Allowance
- Provision: Reimbursement for business mileage in your own car.
- Conditions: Paid at HMRC’s approved rates (currently 45p per mile for the first 10,000 miles in a tax year and 25p per mile thereafter).
5. Annual Health Checks and Medical Screenings
- Provision: One annual health check or medical screening.
- Conditions: Available to all employees, including directors.
6. Workplace Parking
- Provision: Free or subsidized parking at or near the workplace.
- Conditions: Must be available to all employees.
7. Trivial Benefits
- Provision: Minor benefits with a value of £50 or less per benefit.
- Conditions: Not cash or cash vouchers, not provided as a reward for work, and not in the terms of the employment contract. The annual cap for directors is £300.
8. Eye Tests and Glasses
- Provision: Eye tests and glasses required for VDU use.
- Conditions: Only covers the cost of the eye test and the glasses or lenses needed for VDU use.
9. Relocation Expenses
- Provision: Payments to cover the costs of relocating.
- Conditions: Up to £8,000 of qualifying relocation expenses can be paid tax-free.
10. Training and Development
- Provision: Work-related training courses and associated costs.
- Conditions: Must be directly related to the director’s job.
11. Life insurance
- Provision: Company can pay for a Relevant Life insurance policy.
- Conditions: Will only pay out if the director dies or is diagnosed with a terminal illness while they are employed by the company.
