childcare, up to a total of childcare costs of £10,000 per child per year. The scheme will therefore be worth a maximum of £2,000 per child (£4,000 for a disabled child). Parents are able to apply for TFC for children under 12 (up to 17 for children with disabilities). To qualify for TFC all parents in the household must generally meet a minimum income level, based on working 16 hours a week (generally £152 a week) and each earn less than £100,000 a year and not already be receiving support through Tax Credits or Universal Credit.
advisory rates, or by reimbursing your employer for fuel used privately using the same rates. Considering a company van Where a company vehicle is still appropriate, it is worth considering a van as opposed to a car. Unrestricted use of a company van results in a taxable benefit of £3,600, with a further £688 benefit if free fuel is also provided. Limiting the employee’s private use to only home-to-work travel could reduce both figures to zero. Considering a company car Case Study Hailey is an owner-director. Her company car has a list price of £25,785. The car runs on petrol and emits CO 2 at a rate of 93g/km. Hailey pays tax at 45% and her 2022/23 tax bill on the car is therefore £2,669 (£25,785 x 23% x 45%). Hailey’s company will pay Class 1A NICs of £892 (£25,785 x 23% x 15.05%). The company also pays for all of Hailey’s petrol. Because she does not reimburse the cost of fuel for private journeys, she will pay tax of £2,618 (£25,300 x 23% x 45%) and the company will pay Class 1A NICs of £875 (£25,300 x 23% x 15.05%). The total tax and NIC cost is £7,054. Childcare schemes In 2017, the government introduced a tax incentive for childcare, Tax-Free Childcare (TFC). Under TFC, the tax relief available is 20% of the costs of
Your next steps: contact us to discuss…
• PAYE and payroll issues • Ensuring you have the correct PAYE code • Putting together an attractive and tax- efficient remuneration package • Cutting the cost of company cars and reviewing the alternatives • Minimising NIC costs and understanding the tax implications of company cars
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Tax and Employment
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