Is your business missing out on tax exempt bonuses?
90 per cent of businesses are missing out on tax exempt bonuses that could boost staff productivity and morale.
An increasing number of British businesses would like to regularly reward their staff with bonuses but feel limited by budgets, according to new research.
However, fewer than one in ten employers are aware of the government allowances that would allow them to make the tax-exempt awards, allowing them to more regularly give small rewards to boost staff productivity and morale.
A survey of 1,500 UK workers and business leaders by One4all Rewards, as part of a campaign to raise awareness of HMRC’s Trivial Benefits Allowance, revealed that 83 per cent of British bosses would like to give regular bonuses and rewards to their employees in a bid to boost employee morale, motivation and loyalty.
More than half (53 per cent) of British business leaders said that they do not currently give their employees non-performance related benefits because the business does not have enough budget and cannot afford them.
In April 2016 HMRC made changes to workplace benefits rules to allow businesses to benefit from the exemption – reducing tax and National Insurance Contributions charges. However, only ten per cent of businesses are currently making use of the tax exemption on trivial benefits.
Just over a fifth (22 per cent) of UK businesses are aware of the tax relief available on trivial benefits, with only 11 per cent planning to make use of them before the end of the current tax year.
Despite the relatively small sums involved, the survey showed that receiving this kind of benefit would improve workers’ morale (48 per cent), make them feel more loyal to the company (35 per cent) and even motivated to work harder (31 per cent).
What’s more, 62 per cent of workers said that rewards in the form of a gift voucher or card which allows them to choose their own reward, would have the biggest impact on their attitude towards work.
Almost half (47 per cent) of UK workers stated that they would most appreciate a bonus or reward not linked to their performance at Christmas, 32 per cent would like to receive a bonus after a particularly busy period at work and 26 per cent on their birthday.
Alan Smith, UK managing director of One4all Rewards, says, ‘There is lots of potential for British businesses to offer non-performance related benefits to their staff under the latest HMRC changes to the workplace benefits rule.
‘The changes to the workplace benefits rule have been introduced to help businesses similar to those we surveyed, who have limited budgets to reward their employees.
‘We can see from the research that only a small proportion of businesses are currently making use of the tax exemption on trivial benefits, however, 11 per cent of UK bosses are intending to make use of the tax exemption before the end of their tax year.
‘As Christmas was highlighted as the top season workers would like to receive a benefit, now is the perfect time for business leaders to consider making the most of the tax exemptions on non-performance related trivial benefits.’
One4all Rewards are industry experts in benefits and rewards. Working with over 6,000 businesses of all sizes nationwide, One4all Rewards helps to transform customer and employee relationships through successful rewards and incentive schemes.