Tax exempt benefits

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

There is a long list of benefits which are completely exempt from tax. This note highlights some of the more familiar tax exempt benefits. Additional information is available in the Common exempt or non-taxable benefits guidance note.

Pension contributions

No taxable benefit arises if an employer pays into either the employee’s occupational pension scheme or into the employee’s personal pension scheme.

One of the most valuable benefits that employees receive from their employers is an employer’s contribution to the employee’s pension scheme. This is exempt from tax as long as the pension scheme is registered and pension contributions do not exceed any relevant maximum allowances. For more information, see the Pension contributions by owner managed companies guidance note.

Removal expenses

The reimbursement of removal expenses is exempt, up to a maximum amount of £8,000. For example, if an employee is transferred to another office and the employer pays the relocation expenses, no taxable benefit will arise as long as the cost of the move is less than £8,000.

The exemption applies to ‘removal benefits’ and to the

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