It might feel like money only flows one way between your business and HMRC. But that’s not always the case. We give you the lowdown on seven tax breaks that will help you attract and retain employees.
1. Tax-free childcare
Once the domain of employers, tax-free childcare is now run by the government. However, that shouldn’t stop you from directing employees who need support to the scheme.
Employees can claim up to £2,000 per year per child towards childcare which includes nurseries, childminders, nannies, after school clubs and play schemes.
Advertising this important tax-free assistance will help your staff make their pay go further, return to work after maternity, paternity or adoption leave and it also means they’re more likely to stay at work too.
2. Work-related training
Two thirds of UK employees have left their job due to a lack of training. The good news is that as long as training and related costs (like books or travel expenses) are work-related, the cost is tax and NI free.
3. Professional fees and subscriptions
In a similar vein to tax-free training, HMRC allows you to claim tax relief on fees or subscriptions to approved organisations, again, as long as they relate to an employee’s job. Refunding a few hundred pounds might not seem like a big deal, but allowing staff to claim back their professional fees casts you as an employer that supports professional development. Making your staff more likely to stay with you in the long term.
4. Help to Save
With a long period of flat real-wage growth, employees have been struggling to save. HMRC provides a number of help-to-save initiatives that give employees the convenience of workplace saving plus some handy tax breaks:
- Save As You Earn is a monthly saving scheme that gives employees a tax-free bonus and an option to buy shares in your company at the end of the scheme
- Share Incentive Plans are a tax efficient way to buy or receive shares in your company because employees don’t pay tax or national insurance contributions on the shares they buy
- Help to Save is for people who receive Working Tax Credits or Universal Credit. They’ll get a bonus of 50p for every £1 they save over four years.
Employees only receive bonuses after paying into each programme after several years so these savings schemes can act as a retention tool.
5. Tax-efficient benefit schemes
Making the most of the tax breaks that are still available to employers is a brilliant way to support employees.
Tax-efficient benefit schemes - including pensions, Bike4Work and cars - help employees’ salaries go further. By offering employees a wide range of benefits, your organisation’s total reward remains competitive helping you to recruit and retain staff.
6. Apprenticeship support
Apprenticeships are a great way for organisations to recruit a more diverse range of applicants. And with significant government contributions available for smaller businesses, it’s also a cost-effective way to hire, train and retain a skilled workforce.
If your payroll bill is under £3m you only need to pay 10% towards the cost of training and assessing your apprentice. The government tops up the other 90% to a training band maximum.
Depending on the circumstances of your apprentice and your business, you may be eligible for additional funding.
For organisations with a payroll over £3m each year, you must pay an employee apprenticeship levy. However, you will receive an apprenticeship allowance of up to £15,000 per year, per apprentice.
7. Far-flung recruitment
Finding it hard to source suitably skilled and experienced employees? Then consider expanding your recruitment pool and take advantage of HMRC’s tax break on moving expenses up to the value of £8,000.
HMRC guidance states that:
- Only qualifying costs are exempt from paying and reporting tax and national insurance. They include:
- The cost of buying or selling a home
- Moving costs
- Buying certain items for a new home
- Bridging loans to bridge the gap between an employee buying a new house and getting the money from the sale of their old home
- These costs are only counted as qualifying if:
- The employee is moving to a new area to start a job with you
- An existing employee is changing their place of work within your organisation (eg relocating to work at another site)
- They are paid before the end of the tax year after the year in which the move took place
- The employee’s new home is reasonably close to the workplace and their old home is not
For full details take a look at HMRC’s guidance here.
Making the most of HMRC tax breaks can make a range of benefits and perks more attractive and affordable for your organisation and your employees. By building out your total reward offering so it includes something for everyone, you’ll stand a better chance of recruiting and retaining the best and brightest.
Request a free demo of our unique and state of the art Car Benefit platform, and find out how much your staff could save with a Tusker car scheme.