Looking after and retaining a great team does not always have to mean simply increasing salaries. There are plenty of other benefits you can provide, some of which can be extremely tax efficient.
Here are a few options worth considering:
Employer pension contributions
Help your employees plan for their future by making additional employer pension contributions. Subject to the relevant rules, there is normally no Income Tax or National Insurance for the employee and no employer’s National Insurance for the company.
Additional holiday
Who doesn’t love an extra day off? Sometimes additional annual leave can be more valuable to an employee than a relatively small pay rise, while also helping with staff retention.
Work-related training
Develop your team and improve your business at the same time, a win-win. Genuine work-related training can generally be paid for by the company without creating a taxable benefit for the employee.
Company mobile phone
You can generally provide one mobile phone per employee without creating a taxable Benefit in Kind, even where there is some private use, provided the contract is between the company and the mobile phone provider.
Private healthcare
This one is normally a taxable Benefit in Kind, but I still really like being able to offer it to employees. For many people, the value and reassurance of private medical cover can outweigh the relatively modest personal tax cost.
Company cars
Again, these are generally taxable, but choose the right vehicle and they can still be extremely tax efficient. Fully electric company cars in particular currently benefit from very low Benefit-in-Kind rates.
Shares in the business
This may sound slightly more extreme, but for key employees it can be incredibly powerful.
Giving employees an opportunity to own part of the business can align your interests, improve retention and allow them to share in the value they are helping to create.