TAX TIP OF THE WEEK - Rather than considering a pay rise for your employees , consider a cheaper way for you to increase their pay via the use of tax-free travel expenses.

In order to cut the red tape for employers , HMRC let you use benchmark rates to cover employee travel and subsistence expenses: The daily rates are as follows:

a) £5 – 5 hours or more traveling
b) £10 – 10 hours or more
c) £25 – 15 hours or more and is ongoing at 8pm

As well as saving you admin time on reimbursing employees for their expenses you can use the rates to give a tax-efficient pay rise.

For example, if one of your employees was on the road most days you could pay him around £2500 tax-free. An equivalent taxable pay rise would set you back £4481. Result for both you and your employee

Just bear in mind that the employee must buy some food with the benchmark payment, though this can be minimal as they want. Whatever they don’t spend is theirs to keep.

Hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist https://bit.ly/2YQbhvr