Our team of experts tell you everything you need to know about giving bonuses to your employees

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

How do you report bonuses to HMRC?

Whether you give bonuses to your employees in cash or in other non-cash forms, you will have to report this to HMRC and you may have to pay additional tax and National Insurance as a result of these bonuses.

What you do actually report, deduct and pay to HMRC all depends on the kind of bonus you give to your employees as they are treated differently by HMRC. The rules are as follows:

  • For cash bonuses (this includes vouchers which are exchangeable for cash): bonuses paid in this way count as earnings, so they need to be added to the employee’s other earnings and PAYE tax and Class 1 National Insurance should be deducted through your payroll.
  • Non-cash bonuses: there are different rules depending on the item you give so you need to follow the rules for that specific item – we will explain how each item is treated in our Expenses and Benefits A to Z section, so look up the particular item in our guide index and follow the rules we explain when reporting the item to HMRC. In some cases, you might be expected to use PAYE when giving non-cash bonuses if HMRC deems the item to be easily converted into cash.

How can DSR Tax Claims help?

We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful.  Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

This page was last updated on 06/11/2018.

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