We have been engaged to provide information on how store owners could reward employees in such a way that is tax efficient in the hands of the employee and still be used as an expense against tax for the employer. In our opinion, the following examples are some effective ways in achieving this goal.
1. Small non-cash Benefits
There is an annual payment of €500 (or less) allowed to each staff member which is not subject to Tax. The payment must not be in cash, with this in mind the most common practice is to provide a voucher, some storeowners have provided an ‘in store voucher’ you should speak with your accountant to ensure this is recorded accurately.
2. Provision of bicycles for directors and employees
You may purchase a new bicycle and safety equipment up to a maximum value of €1,000 per employee. This is not a benefit in kind (BIK). Where you spend more than €1,000, the excess is treated as a BIK.
You may spend less than €1,000 in the first year but pay for additional items within the five-year period. If so the cost of the additional items is treated as a BIK.
See the following link for additional information
3. Travel Passes
You may provide a monthly or annual travel pass to your employees. Travel passes can include bus, train, Luas and ferry services. This is not a benefit in kind.
The bus, train or ferry pass must be issued by public or private operators who hold valid licenses.
All storeowners should get their own tax advice from their accountant confirming that they can avail of the above revenue approved exceptions
JP Wynne
Partner
Drohan Ryan Wynne & Co,
Gladstone House,
1 Gladstone Street,
Clonmel,
Co. Tipperary.
Ph: 052-6123982 Fax: 052-6125210
