Limited Companies and Trivial Benefits.

[cashmax]

Just read up on this, didn't even know it was allowable and fully deductible. Surprised my accountant never mentioned it.

[CaiosH]

So as a director I can treat myself to a £50 meal out 6 times a year?

That per company? :-)

[lizardbrain]

I ve never heard of this either, and my accountant has never mentioned it. It does make me wonder whether I should consider changing accountants.

my accountant is very experienced and good on the compliance stuff and cleaning up my mess. But has never proactively made tax advice about this kind of thing.

I wonder if anyone here hires a dedicated tax advisor separate to an accountant? I suppose there is a case to be made that there are separate areas of expertise.

[Panamax]

I'm not convinced it's worth paying your accountant to tell you about "trivial" stuff.

[OtherBusiness]

You can use this trivial benefits allowance to buy vouchers for the directors.... eg John Lewis and then get £300 per annum out tax free per director/employee

If you work from home you can also set up a "use of home agreement" with the limited company. More info here (no connection, just a random google search) https://www.msaaccountants.co.uk/2530951_use-of-ho...

Edited by OtherBusiness on Thursday 4th December 14:57

[Dg504]

Wait till you hear about what other owners of Ltd co’s put through as business expenses… All part of the ‘risk/reward’ isn’t it?

[iphonedyou]

lizardbrain said:

I ve never heard of this either, and my accountant has never mentioned it. It does make me wonder whether I should consider changing accountants.

If that's a reason for binning your accountant, I can only imagine he'd be grateful for you making the call.

[Tyndall]

OtherBusiness said:

You can use this trivial benefits allowance to buy vouchers for the directors.... eg John Lewis and then get £300 per annum out tax free per director

If you work from home you can also set up a "use of home agreement" with the limited company. More info here (no connection, just a random google search) https://www.msaaccountants.co.uk/2530951_use-of-ho...

This one is ending next year I think but as you say, at the moment, you can transfer yourself £312 WFH allowance from the company bank account tax free.

[cashmax]

CaiosH said:

So as a director I can treat myself to a £50 meal out 6 times a year?

That per company? :-)

It appears so, my son who is a casual employee can also take advantage of the same benefit, but potentially more lucrative because there are no limits.

So it would be perfectly reasonable for a small ltd company with a sole director and a single casual employee to be paying north of £1000 annually in tax free and completely deductible benefits. Not entirely trivial in my opinion.

[sagarich]

Ours handily added it their Christmas opening hours email.

[isleofthorns]

Perfect....

that's the stocking dealt with for this year!!

[MaxFromage]

cashmax said:

It appears so, my son who is a casual employee can also take advantage of the same benefit, but potentially more lucrative because there are no limits.

So it would be perfectly reasonable for a small ltd company with a sole director and a single casual employee to be paying north of £1000 annually in tax free and completely deductible benefits. Not entirely trivial in my opinion.

I'm afraid that's incorrect if the company is a close company. Under those circumstances the £300 cap is also applied to other office holders, family and household members.

[Sheepshanks]

Going back some years now, my missus work for various Civil Service departments (including HMRC). She ended up at the Insolvency Service and was most bemused to be quite frequently given £50 shopping vouchers.

Interesting to see the pasted info above - she was always told they were allocated randomly.

[Chris Type R]

CaiosH said:

So as a director I can treat myself to a £50 meal out 6 times a year?

That per company? :-)

Our accountant took a dim view of the directors(employeed) receiving £50 vouchers for Christmas. It seemed to me that it was a legitimate expense.

Edited by Chris Type R on Friday 5th December 07:11

[locoloco]

i had a huge row with my accountants over this about 4-5 years ago. They'd never told me, and as a 1 man band type company with Mrs on the payroll, i was legitimately able to regularly splurge on gifts for her and as folks alluded to above the £300 for me as Director.

the other row was over 'canteen'.
we had a dedicated office in the garden, a proper affair with kitchen/showeroom etc - so when i went to work i literally spent the full day in there.
I argued that surely there shd be an allowance ( per HMRC). Accountant finally agreed that yes it was permissable.
From that moment on had to pay for a portion of the weekly shop on the company card ( can't be claimed back from a personal card) and the other portion i paid for on our personal card.

IIRC - the rules were grey but basically in a nutshell was 'don't take the pee with fine wines and smoked salmon every day'.
(all that was required to comply was self contained office and 1 employee).

accountants used to work for their clients - not so much these days!

[Eric Mc]

iphonedyou said:

lizardbrain said:

I ve never heard of this either, and my accountant has never mentioned it. It does make me wonder whether I should consider changing accountants.

If that's a reason for binning your accountant, I can only imagine he'd be grateful for you making the call.

Exactly. For small one or two man limited companies - the type many of us accountants deal with - the tax savings are absolutely negligible. The cost of providing the advice is more expensive than the tax saved.

There are far bigger and better tax savings to be had in other areas - although if a business is fixated with saving tax then I would argue they are not concentrating on what they should REALLY be doing, which is ensuring that their business is running effectively, profitably and providing them with the income they require to live.

Don't let the tax tail wave the business dog.

[Eric Mc]

locoloco said:

accountants used to work for their clients - not so much these days!

What ALL of them?

[Puzzles]

We do send an annual email about this and functions.

The gifts can’t be a reward for work or performance. Well they can but… taxed.

You can’t give an employee endless £50 vouchers.

[cashmax]

Eric Mc said:

iphonedyou said:

lizardbrain said:

I ve never heard of this either, and my accountant has never mentioned it. It does make me wonder whether I should consider changing accountants.

If that's a reason for binning your accountant, I can only imagine he'd be grateful for you making the call.

Exactly. For small one or two man limited companies - the type many of us accountants deal with - the tax savings are absolutely negligible. The cost of providing the advice is more expensive than the tax saved.

There are far bigger and better tax savings to be had in other areas - although if a business is fixated with saving tax then I would argue they are not concentrating on what they should REALLY be doing, which is ensuring that their business is running effectively, profitably and providing them with the income they require to live.

Don't let the tax tail wave the business dog.

Whilst I agree that not mentioning this is not exactly a decent reason to bin your accountant. I would argue that although its a small benefit, it's still worth circa £1K to a small business and being deductible it cuts both ways. I doubt many accountants would forget to make sure their fee is included in the businesses cost.

In my case I have a rental property that happens to be owned and managed via a ltd company. The P&L is pretty straight forward and there is little in terms of tax breaks, so as Tesco famously said, every little helps.

I suppose it comes down to what someone who owns a small business wants from their accountant - Someone who checks the boxes and fills in the figures you gave them on the form and submits it, or someone who is slightly more proactive and suggests how those numbers might be optimised.....

[locoloco]

Eric Mc said:

What ALL of them?

Fair point shoudn't have made that sweeping generalisation; However, of the folks i know who have 1-8 employees not 1 receives advice on these types of 'fringe' aspects.
My own relied on auto emails to remind / inform about capital ex's etc, there was never any personalised discussion about ' we noticed that you haven't allowed for xyz', 'have you thought about abc' etc.

for a smaller concern saving a few thou on tax or having the extra £'s in the Dir/employees pocket can be worthwhile, especially with various threshholds frozen/reduced.