Where do i stand tax wise on the following?
Discussion
How does my company stand on the following.
1) Its close to christmass and i would like to send each of my regular suppliers / regular customers a box of chocolates at a cost of perhaps £10 each. Maybe £100 cost in total. Legitamate business expense? What would the tax man say?
2) We have a fridge in the workshop that i like to keep stocked with cold drinks for employees. I also supply biscuits. Its good for moral. Again, is this a legitamate business expense? Is this a taxable benefit for them? I used to work for a very large organistation where tea and coffee were always free. They spent £100 a week on just milk.
1) Its close to christmass and i would like to send each of my regular suppliers / regular customers a box of chocolates at a cost of perhaps £10 each. Maybe £100 cost in total. Legitamate business expense? What would the tax man say?
2) We have a fridge in the workshop that i like to keep stocked with cold drinks for employees. I also supply biscuits. Its good for moral. Again, is this a legitamate business expense? Is this a taxable benefit for them? I used to work for a very large organistation where tea and coffee were always free. They spent £100 a week on just milk.
I'm not an accountant but can't imagine the taxman challenging either of those if the amounts are reasonable.
My test for my own business, is if investigated, can I look the taxman in the eye and say an expense was wholly incurred in the course of business. If I can, do it! ...of course, if suspicious, the taxman may want to see delivery notes &/or phone a supplier randomly to ensure that the chocolates made it to the supplier, and not your Christmas tree!
My test for my own business, is if investigated, can I look the taxman in the eye and say an expense was wholly incurred in the course of business. If I can, do it! ...of course, if suspicious, the taxman may want to see delivery notes &/or phone a supplier randomly to ensure that the chocolates made it to the supplier, and not your Christmas tree!
"Business Entertaining" is NEVER allowed for tax purposes - even if it is "Wholly and Exclusively for the purpose of the trade". So, if the buying of presents and gifts for customers/suppliers etc is classified as part of "Entertaining", then it will be "added back" in the tax computations.
The provision of free food and beverages to staff is allowed as a business cost but is, strictly speaking, a taxable Benefit in Kind. On the whole, HMRC are not so mean minded as to make an issue of this but there was once case a number of years ago where an employer was slapped with an underpayment of BIK related PAYE because they had failed to disclose the provision of tea and biscuits to staff.
Outside of tax issues, the giving of gifts to third parties might mean you could fall foul of the Bribery Act.
The provision of free food and beverages to staff is allowed as a business cost but is, strictly speaking, a taxable Benefit in Kind. On the whole, HMRC are not so mean minded as to make an issue of this but there was once case a number of years ago where an employer was slapped with an underpayment of BIK related PAYE because they had failed to disclose the provision of tea and biscuits to staff.
Outside of tax issues, the giving of gifts to third parties might mean you could fall foul of the Bribery Act.
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