|Your employee's statutory rights|
By being on a PAYE scheme and having NI contributions deducted from their salary your employee has certain statutory rights, which you as an employer have a legal responsibility to adhere to. These include rights to statutory sick pay and maternity pay and leave, as well as contributions towards their state pension and unemployment benefits. In addition your employee is also entitled to annual paid leave and redundancy pay.
|Basic document checks|
According to the Asylum and Immigration Act 2006 all UK employers have a legal duty to make basic document checks on each person they intend to employ in order to establish that they have a right to work in the UK and are here legally.
|Benefits in kind|
Benefits in kind are sometimes provided by the employer in addition to the employee's salary. They are often taxable benefits and must be reported annually as part of employee's gross earnings.
Who pays the tax?
Tax on benefits in kind is payable in arrears and is not reported until July following the end of the tax year. Sometimes it can take up to two years before payments are claimed by HMRC, and during the interim your employee can have moved from one job to another, leaving the new employer responsible for paying what can in some cases be a very large sum of money. If your employee is on a gross wage, however, then the tax is deduced from their gross income at their current rate of tax.
In addition to tax there may also be a Class 1A NI charge of 12.8% of the value of the benefit to be paid - the employer always pays this charge.
Examples of taxable benefits
NB: PLEASE NOTE THAT THIS LIST IS NOT EXHAUSTIVE.
Mobile phones are not considered a taxable benefit
Use of Car
Please note that the information and examples contained on this page are to be used as guidelines only. If you have specific questions please contact Stafftax.