Sales incentives for employees – how do companies do it?

[scu_be_doo]

Many of our competitors give away holidays, watches, electronic products, etc to their top performing sales staff. I’d like to start a similar scheme for our people.

Sales staff at other companies tell me they don’t pay any extra tax on these incentives. Is this possible?

Can you put this sort of thing through the books in some way that it doesn’t incur any tax for the staff?

And can you reclaim the VAT?

Any advice would be much appreciated.

[scu_be_doo]

Fidgits said:

all the sales guys I know would much rather have the cash than a rolex or a holiday

HTH

They get a very competitive commission structure as well. We have 21 year olds taking home £4K+ p/m.

This is really because our competitors do the same thing and it works for them. In the type of sales environment we run (average age about 22-23, fairly high pressure, big ties, very status driven individuals) they would be incentivised by flashy watches, skiing holidays, etc.

[scu_be_doo]

KingRichard said:

So a bunch of mobile phone salesmen then?

I see someone with a big tie knot and immediately think 'warra cock'.

So do I, but as long as they are generating income they can wear pyjamas if they want to.

Thanks for the advice on the types of incentive though.

What really need to know is how companies put these incentives through the books in some way that it doesn’t incur any tax for the staff? And if the VAT is reclaimable?

Thanks,

Scu_be_doo

Edited by scu_be_doo on Monday 25th February 11:59

[scu_be_doo]

Thanks for the input everybody, espcially HiRich and flyingjase. I will have a chat with our accountant about PSA's and HRMC.