Businesses in the tech sector frequently tend to start small and achieve exponential growth, often in a relatively short space of time. Although that is a great place to be, such growth does not come without its challenges - many of which have employees at the heart.
Talent management
First and foremost, recruiting talent with the right mix of experience, digital skills, and the motivation to achieve great things, is not easy in the current job market. But it’s not just about getting good people in place; the challenge is to retain them in the business for the long-term, particularly those employees at the top of their game who will always be attractive to your competitors.
The key to being an employer of choice is to offer an attractive blend of:
- Competitive salaries
- Innovative and effective incentivisation schemes
- Staff benefit offerings that tie in with the lifestyle needs of your staff
- Tax efficiencies that maximise take-home pay
Employment tax compliance
Another key challenge is to proactively manage the business’ tax compliance responsibilities in relation to staff payments and benefits. This can be particularly difficult when the focus is on growing the business rather than dull paperwork and processes.
Employment regulations and tax law are extremely complex in the UK and there are many ‘traps’ employers can fall into by not being au fait with the rules or interpreting them incorrectly. Around 85% of all income tax paid in the UK is collected via PAYE and so, understandably, HMRC invests significant resources into compliance activities in this area.
In our experience, the biggest problems arise with tax failures when proper processes and controls have not been introduced near the beginning of the business journey and instead left until the business is out of its infancy. Poor admin practices that develop over time can have a serious financial and reputational impact on the business in the event of an audit from HMRC. Areas that can be particularly troublesome include:
- Staff expenses e.g. travel, subsistence, accommodation
- Staff benefits, especially company vehicles, technology, and living accommodation
- Salary sacrifice
- Incentive arrangements that involve anything other than straight cash paid when due
- Joining incentives and leaver packages when the employment is terminated
JC support
Our experienced team can help any business navigate these challenges. Whether it’s designing an expense policy that meets HMRC requirements, advising on appropriate and tax-efficient remuneration options, or negotiating with HMRC on your behalf, our specialists are on hand to support you every step of the way.
