06: Tips for employers
These tips may help you to reduce your administration costs and the risk of unexpected liabilities:
- Make sure all employees and directors make precise and accurate expenses claims.
- Ask HMRC for a dispensation. This will allow you to pay those expenses covered by the dispensation, eg travel and business entertaining, without having to give details to HMRC each year.
- Where you pay mileage allowances, ensure that proper records are kept of the trips done. If you pay no more than the statutory mileage rate, you do not have to include the payment on annual returns.
- If a worker claims to be self-employed, make sure their engagement with you is really self-employment. If HMRC decides it is an employment, you will be liable for the PAYE tax and NIC and will probably not be able to obtain reimbursement from the worker.
- Giving your employees or directors shares or share options can be very motivational, but the tax and NIC rules are complex. Take comprehensive advice before you implement any share schemes.
