Employee Remuneration

The Finance Act 2006 saw the introduction of the first retrospective legislation with regard to what HM Revenue & Customs (HMRC) considers to be unacceptable tax and National Insurance (NI) avoidance relating to the way earnings and bonuses are paid. This does not, however, mean that employers should just pay cash and accept the tax and NI consequences.

There are still tax and NI-efficient ways to remunerate employees and best practice is to maximise these. There are a number of benefits which have special tax treatment, such as childcare vouchers and parking near a place of work, but these have limited application due to monetary limits and the nature of the benefit provided. The most effective benefits for