Rewarding staff at all levels for a job well done is a must for every employer, regardless of their niche or business size. Whilst many employers are generous when it comes to staff benefits, employee suggestion schemes are often overlooked. But as Swansea accountant Bevan & Buckland will tell you encouraging and rewarding staff for their ideas could in fact unlock a more cost conscious way of improving your business and showing your workers that you care.
“Employee suggestion schemes are often an unknown for employers looking for great ways to reward staff or simply forgotten about. However the insight of your workers can benefit your business and you have absolutely no tax, National Insurance or reporting obligations when using these types of awards as long as certain conditions are met” said Alison Vickers, Partner at Bevan & Buckland.
There are two types of awards that can be accredited as part of an employee suggestion scheme – the encouragement award and the financial benefit award. The encouragement award is given in exchange for good suggestions whilst the financial benefit award is made to employees who have helped to save or make money on behalf of your business.
“As with any expenses and benefits initiative there are limits to the associated tax, NI and reporting exemptions. Encouragement awards of up to £25 are exempt from tax and National Insurance. Financial benefit awards are exempt up to £5,000 as long as the amount that is exempt is greater than 50% of the money you expect to make or save due to the suggestion or 10% of the money you expect to make or save during the first five years after implementation,” concluded Alison.
For further information regarding employee suggestion schemes and their tax saving business benefits, please contact Bevan & Buckland on 01792 410100.