Benefits in kind which are exempt from tax and national insurance can be a more tax efficient way of taking remuneration from your company than dividends.
Stockport accountants, IN Accountancy, state that ‘Benefits in kind’ are an alternative to cash so they should really replace a cost that you would incur personally out of your taxed income but which the company could pay for. The main ones that are exempt from income tax and NI are:
- Contributions to a registered pension scheme
- Zero emission cars or vans
- Training paid for by your company
- Childcare facilities
- Childcare vouchers (limited exemption)
- Free/subsidised meals in the workplace.
The financial advantage of claiming ‘benefits in kind’ might not be that great but can be worthwhile.
A further advantage is that they can be provided by your company even when it has no profits.
This can make tax and NI-free ‘benefits in kind’ a good option for a young business as it’s often several years before a business starts to make money.
For expert help with working out the best option between claiming dividends and ‘benefits in kind’ for your particular business situation, please contact firstname.lastname@example.org or ring 0161 456 9666.