UK Employment Tax

Many business owners lose sight of the fact that employment taxation involves a great deal more than compliance. As well as dealing with annual P11d expense and benefit reporting, much can be done in this area to benefit employees and owner-managers.

Share schemes, for example, are a proven way to incentivise or reward key employees. Subject to conditions and limits on value, share options can be issued with no income tax or national insurance liability arising on either the grant or the exercise of the option.

For owner-managers, tax legislation offers different liabilities from salary or dividend payments, both of which should be considered in remuneration planning.

Employing family members – where this is commercially justifiable – will permit them to draw salaries and receive benefits. Husbands, wives or civil partners working together in a new business can also benefit from greater tax efficiency.


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