Tax and NI

16. Other Tax Opportunities

16.1 An ordinary employee given a low interest loan by the company receives a benefit, which is normally taxable as income.

• However, for loans up to £5,000, there is no tax payable.

16.2 No tax is payable on long-service awards up to a specified value.

• The value can be up to £50 for each year of service.
• To qualify the employee must have served for 20 years.

16.3 Annual staff parties (or similar celebrations) paid for by the employer are tax free up to a specified limit.

• The cost must not be more than £150 per head a year.

16.4 Employees who receive shares under a tax-favoured share scheme are not taxed until they sell the shares.

• Where employers offer Share Incentive Plans (SIPs), employees can use up to £1,500 of salary each year, free of tax and NI, to buy shares.