Benefits

[Stevenj214]

For a company to provide benefits such as pension contributions, company car and study towards professional qualifications - does it cost the company 100% of the total cost or is there tax savings available?

[Eric Mc]

The company can usually claim these costs as legitimate tax deductable business expenses. So, these costs will help reduce its ultimate Corporation Tax liability. The rate of Corporation Tax varies depending on the levels of profits achieved by the company. The current rates are:

Profits from £0 to £300,000 - 21%
Profits from £300,000 to £1,500,000 - 29.75%
Profits over £1,500,000 - 28%

So, the saving will vary depending on their profits.

YOIU may end up paying additional PAYE on these "benefits". Pension contributions paid by your employer on your behalf are NOT taxable benefits (as long as the pension is the correct type of pension). Other benefits paid by employers are.

Edited by Eric Mc on Thursday 12th March 17:25