Employee trust 101
Binding Private Ruling 330 (“BPR330”) was issued on 3 October 2019 and relates to the tax implications arising from distributions of dividends and other amounts from an employee trust to beneficiaries on the termination of their employment. The taxpayer (a resident trust) was established for the benefit of the black permanent employees of Company A. […]
Employees’ tax (part 1): Personal service providers
For there to be an obligation for PAYE to be withheld is typically dependent on three elements being present. These elements are all defined in the Fourth Schedule to the Income Tax Act[1] and include the presence of an employer, an employee and the payment of remuneration. No employees’ tax can be charged if one […]
Fringe benefits provided to employees
The Seventh Schedule to the Income Tax Act[1] lists various benefits that employers may grant to employees which will attract income tax for the employee,[2] and require the employer to also withhold PAYE on the amount of the benefit granted.[3] These provisions act as anti-avoidance measures to avoid employees receiving “masked” remuneration in formats other […]
Salary sacrifice schemes – latest judgment by the supreme court of appeal
Salary sacrifice schemes are popular in practice. Typically, they involve employers paying a decreased salary to their employees, with an added fringe benefit to make up for the lost ‘cost to company’ sacrificed by the employee to obtain the benefit. For example, an employee may prefer to enter into a salary sacrifice with his/her employer […]