The benefits of providing employee benefits

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Offering benefits to your employees has a number of advantages. If you’re deciding whether you could be providing them, consider these potential positives:

1.  Attracting and retaining talent

Offering a perks and benefits can attract talented candidates and retain skilled employees. In a competitive job market, people often evaluate the benefits package alongside salary, contributing to onboarding success and retention.

2.  Job satisfaction

When employees feel valued and supported by their employer, they are more likely to be engaged, motivated, and productive. Benefits such flexible hours, remote working options, or childcare support, can help employees effectively manage their personal and professional lives, improving employee well-being and job satisfaction.

3.  Healthy living

Employee benefits, including health insurance, wellness programs, and access to mental health support can be important to keep your staff at the top of their game. Reducing stress amongst your workforce will create a healthier company culture, which is likely to produce better results.

4.  Tax considerations

Some tax advantages can be achieved by providing particular benefits. These might include:

  • National Insurance Contributions (NICs): Some employee benefits, such as workplace pensions, are exempt from employer NICs. By offering these, employers can reduce their overall NICs liability to save costs.
  • Tax-deductible expenses: Some costs associated with offering certain benefits can be deducted from the employer’s taxable profits, reducing the amount of tax they must pay.

It’s worth keeping abreast of the current tax rules and regulations, so you are acting in a way that most rewards both your employees and your business. Read our up-to-date summary of tax rates and allowances…

P11d forms: The deadline’s on its way

If you’re an employer in the UK, the deadline for filing P11d forms to report benefits in kind is 6 July 2023, in respect of directors and employees for the tax year 2022/23. Original and amended reports must now be made online; paper returns will no longer be accepted.

To submit your P11D and P11D(b) returns online, you can use PAYE Online for Employers, PAYE Online for Agents, or payroll software that is recognized by HMRC.

Remember that ‘trivial‘ benefits in kind, provided to employees and directors, do not need to be reported on form P11d. To be considered ‘trivial,’ these benefits must meet certain criteria. They must cost the employer £50 or less to provide, not be cash or a cash voucher, not be a reward for work or performance, and the employee is not contractually entitled to them.

Filing P11d forms accurately and on time is essential for complying with tax laws and avoiding potential penalties. By submitting your returns online and ensuring that you are only reporting the relevant benefits, you can simplify the process and avoid any unnecessary stress or complications.

We can prepare and submit your P11Ds for you, or offer guidance on setting up employee benefits; get in touch and speak to one of our experts, if this is of interest to you.

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