As an employer did you know you can buy your employees a gift voucher to the value of €500 and you won’t have to pay employer PRSI on it and it is an allowable expense for tax purposes. You can do it once a in a calendar year and the €500 is per employee. The employee also avoids (not “evades”) income tax, PRSI and USC on the €500.
Bike to Work Scheme
Your employee can go to an approved bike shop, pick a bike and gear, and get up to the first €1000 of payment paid through their wages. In other words, they buy it from their before tax income instead of their after tax income.
As an employer you pay the shop up front and then deduct the payment from the employee’s wages over a 12 month period. You do get hit for cashflow!!
As an employer you don’t have to facilitate the scheme but if you do you must offer it to everyone so make sure you don’t get hit with 15 employees looking for it at the same time. Believe me, once one does it and finds out how good a deal it is they will all want to do it.
If you have had a good year and your year end is December 31st you are going to be paying corporation tax next year. One way to reduce your tax bill is to pay a pension contribution directly from company profits and into a pension for yourself or even your employees. Obviously, company pension contributions will be fully tax deductible and also avoid USC and PRSI.
If you are self-employed you can do it for your employees, but it may not be this time of year you do it for yourself.
Have a Beer!
If you want to entertain staff with a Christmas party, or indeed if you want to entertain staff at any time of year it is a tax-deductible expense provided all staff are invited and the entertainment is reasonable.
If your spouse is a director in your business, they can come.
This also applies to the simple things. For example if you are going for lunch on your own it is not a deductible expense. Bring the entire office and it is now considered staff entertainment and becomes and allowable expense. Be careful of false economies!
Whatever about entertaining staff being allowable, client entertainment and client gifts are not tax deductible but can be legitimate business expenses.
You should however talk to your own accountant about this because if the item or event is considered a business development expense it may be allowable.
For example, a client dinner, provided it is reasonable, may be considered a business development meeting. If business was discussed. Whereas 18 pints and a kebab may be less acceptable.
Or 6 bottles of red wine may not have any value from a business development point of view but if you get your company logo engraved on the bottle or printed on the label is it now coming out of the advertising budget?
These are grey areas and something that you would want to check with your own accountant, but I think the word reasonable is the important one here!!
Pay your Bills!
Lastly, if you are having a good year but have outstanding invoices, don’t inflate how good the year was and inflate the ultimate tax bill by letting expenses accrued in the current year be rolled into next year. Pay the bills now, if you’ve got the cashflow.