Reports and Record Keeping:

Record Keeping Requirements:

Date and purpose of the journey
Distance travelled.
Receipts
Reporting to HMRC:

Most tax-free expenses do not need to be reported to HMRC

Taxable payments must be included in payroll or reported through a P11D form. This includes excess mileage payments, healthcare benefits and other rewards paid by the employer.

Mileage payments under the AMAP rates can be reclaimed via a self-assessment tax return.

Employee Travel

Travel and Subsistence:

Employers can reimburse employees and subsistence costs incurred for business purposes:
The journey must be necessary for work (travel between workplaces or to a temporary workplace).
Expenses must be ‘wholly, exclusively and necessary’ for the trade.
Subsistence can cover meals, accommodation, and other incidental expenses.

HMRC Approved Mileage Rates:

Cars and Vans – 45p per mile (first 10,000 miles), 25p per miles (over 10,000) miles.

Motorcycles – 24p per mile

Bicycles – 20p per mile

Tax Implications:

Payments up to the AMAP rates (listed above) are tax free. If an employer pays more, the excess is taxable. If an employer pays less, tax relief can be claimed by the employee on the difference.

Deadlines for payments:

31^st Jan 2026 – Self Assessment Tax Return

6^th July 2025 – P11D Submission Deadline

Benchmark & Bespoke Scale Rates:

Employers can use scale rates to simplify expense reimbursements for meals and travel costs:

HMRC approved fixed amounts
Cover meals for employees who travel for work
Employers do not need to keep receipts if paying at bespoke rates
Must be agreed with HMRC and supported by an ‘expense sampling exercise.’

Tax Free Vouchers for Employees:

Trivial Benefits for Employees:

A trivial benefit is a non-cash reward given to employees that meets specific criteria set by HM Revenue & Customs (HMRC). To qualify for tax exemption, the benefit must:

Value: Cost £50 or less per employee, including VAT.
Form: Not be cash or a cash voucher (exchangeable for cash).
Purpose: Not be a reward for work or performance.
Contractual Obligation: Not be provided as part of any contractual obligation or salary sacrifice arrangement.

For Directors:

While there’s no limit on the number of trivial benefits an employee can receive, directors of “close” companies (typically companies controlled by five or fewer shareholders) have an annual cap of £300. This cap also applies to benefits provided to their family or household members.

Tax Implications on Employee Benefits:

Employee:

Employees pay income tax on taxable benefits dependent on their value, the tax paid on the benefit will depend on the invidiuals’ rate of tax.
Some benefits can be provided via salary sacrifice, which reduces an employees taxable salary and saves on NICs.

Employer:

Many benefits provided to employees are deductible, this will reduce taxable trading profits.
If a benefit is taxable for the employee, the employer will pay 13.8% class 1A NICs on the value of the benefit.

Miscellaneous Tax-Free Benefits for Employees:

Long Service Award
Tax free if employee served at least 20 years and the award value does not exceed £50 per year of service.

Christmas Parties
Tax free if it is an annual event which is open to all employees. The cost must not exceed £150 per person.

Mobile Phones
Employers can provide one mobile phone per employee tax free; this includes calls and monthly fees. The employer must own the phone.

If you need tailored advice on structuring your benefits package or understanding tax implications, our expert team is here to help. Get in touch today to explore the best options for your organisation. You can create a supportive and rewarding work environment while optimising tax efficiency for both your business and employees.

Reports and Record Keeping:

Employee Travel

Deadlines for payments:

Benchmark & Bespoke Scale Rates:

Tax Free Vouchers for Employees:

Tax Implications on Employee Benefits:

Tax Implications on Employee Benefits:

Miscellaneous Tax-Free Benefits for Employees:

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Employee Benefits and Expenses

Reports and Record Keeping:

Employee Travel

Deadlines for payments:

Benchmark & Bespoke Scale Rates:

Tax Free Vouchers for Employees:

Tax Implications on Employee Benefits:

Tax Implications on Employee Benefits:

Miscellaneous Tax-Free Benefits for Employees:

Useful links

Latest

Get in touch