Employee Pay Options

[90 Right]

You could give redeemable shares that you have a right to buy back at any time. There are rules, and it could draw unwelcome attention. But if the dividend paid was small in relation to total compensation, maybe 4-5%, you could say, "I want my employee to share in the profits when we do well." Discussed.

I wouldn't go that way, but it's an option.

If your employee has or is thinking about buying life insurance or private medical insurance, you could reduce the salary by that amount and pay for it yourself. Same with a gym membership.

It's a benefit in kind, so it is subject to income tax and employer NI, but your employee doesn't have to pay employee's NI, so it basically cuts the cost for them by 10%.

You can also get a mobile (in the company's name) and give it to your employee. I think that is entirely tax free.

Ask your accountant. It doesn't make sense to do anything your employee wouldn't spend money for, but things that they would buy themselves, if you can do it as a benefit, it can save a little bit of tax.

Thanks for the link & the other suggestions. I'll have a read and speak to my accountant.

[WordIsBond]

If possible I’d like to try and help my employee maximise their earnings by minimising their tax. I’m already maxing out their childcare allowance and the other options seem mega complicated, i.e paying part of their salary as dividend, by making them an ‘employee’ or ‘non voting’ shareholder (don't really want to give away part of the Ltd either).

You could give redeemable shares that you have a right to buy back at any time. There are rules, and it could draw unwelcome attention. But if the dividend paid was small in relation to total compensation, maybe 4-5%, you could say, "I want my employee to share in the profits when we do well." Discussed.

I wouldn't go that way, but it's an option.

If your employee has or is thinking about buying life insurance or private medical insurance, you could reduce the salary by that amount and pay for it yourself. Same with a gym membership.

It's a benefit in kind, so it is subject to income tax and employer NI, but your employee doesn't have to pay employee's NI, so it basically cuts the cost for them by 10%.

You can also get a mobile (in the company's name) and give it to your employee. I think that is entirely tax free.

Ask your accountant. It doesn't make sense to do anything your employee wouldn't spend money for, but things that they would buy themselves, if you can do it as a benefit, it can save a little bit of tax.

[AJ1982]

There are some ideas here but I'd personally avoid them like the plague. Doing something to reduce tax for a non business justification could be seen as aggressive avoidance.

Top 5 tax-efficient ways to reward employees | Page 2 - Real Business

Wouldnt touch No.5 with 10 footer!!!

[NotAllThere]

There's avoidance and aggressive avoidance. It's head in the sand to pretend that the latter doesn't exist. The fact that it may not be a legally defined category is irrelevant - the government and their minions will clamp down hard on any discovered aggressive avoidance, to the extent of changing the law (and even attempt to do so retrospectively).

[SlipTheJab]

There are some ideas here but I'd personally avoid them like the plague. Doing something to reduce tax for a non business justification could be seen as aggressive avoidance.

Top 5 tax-efficient ways to reward employees | Page 2 - Real Business

Despite politicians bleating otherwise avoidance is legal as opposed to evasion, do agree with NLUK unless it's your missus you're taking on it isn't worth the hassle.

[northernladuk]

There are some ideas here but I'd personally avoid them like the plague. Doing something to reduce tax for a non business justification could be seen as aggressive avoidance.

http://realbusiness.co.uk/article/26...ployees/page:2

[northernladuk]

This is your livelihood so I wouldn't be dicking about with companies finances to try help someone else IMO. Is this person family/friend/romantic interest by chance?

You could of course ask your accountant but I think he will suggest you do it down the line.

[90 Right]

Hi, not sure if anyone can help me, but my Ltd has been going well and I’ve taken someone on 3 days a week to help out……

If possible I’d like to try and help my employee maximise their earnings by minimising their tax. I’m already maxing out their childcare allowance and the other options seem mega complicated, i.e paying part of their salary as dividend, by making them an ‘employee’ or ‘non voting’ shareholder (don't really want to give away part of the Ltd either).

It would be great to hear if anyone knows how this would work, or has any other (legal) solutions.

Cheers.....