When you are looking into rewarding your staff using incentive schemes, it is worth being aware that there will be certain tax considerations to take into account. There are many things to consider and understanding the tax implications of rewards and in turn how the costs match up to improving staff motivation, you should be able to understand far more easily whether or not such a scheme is right for your business.
The first thing to remember is that in any voucher offered to staff, tax will be included.
However, things can get confusing here. There is a difference between retail vouchers and credit vouchers and different tax rules apply to each. Knowing which type of vouchers you are offering and the relevant tax laws on each is therefore extremely important and talking to any rewards company about the implications is a must. It is worth remembering that different companies often have different ways of dealing with tax legislation and it is best to find a company who is as open with you as possible. Some disclose the VAT rates they charge whilst others don�t, making things even more confusing to businesses. By finding a business who is very open about the process, it will make your job far easier in the long run.
For those who wish to offer incentive schemes but are still uncertain about what the TAX implications are with different types of vouchers, The Voucher Association will be able to answer any questions you may have. However, by simply finding the best incentive company, you should find that the process is extremely clear right from the start.
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