Sponsorship of a hole on a golf course - any P11D liability??

Sponsorship of a hole on a golf course - any...

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I was hoping someone could help.

We have a client that sponsored a hole on a golf course through their company, in the company name.  There is a banner displayed beside the tee box for everyone to see.  But in return they receive vouchers for 24 rounds of golf, and these vouchers can be used by anyone - clients, employees, family etc.

None have been used yet, but they are planning on having an outing later in the year for friends and clients.  Vouchers last for 12 months.

Do the vouchers give rise to a P11D benefit, and what value can be attached to them?  We are a bit stuck as it is still legitamite advertising that the company paid for in the first instance.

Thanks in advance.

Replies (5)

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By Steve Knowles
11th May 2011 14:43

voucher cost

Did the company sponsor with an expectation of receiving the vouchers? If not, the argument must be that although in theory there is a benefit, in practice no benefit arises because there has been no cost to the employer which can be attributed to the vouchers..

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By PennyC
11th May 2011 14:59

But watch potential

non-deductibility on wholly & exclusive grounds

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By johnpayne44
11th May 2011 15:34

capital?

Sponsorship costs are allowable in arriving at the profits except where they are:

·         Capital expenditure (e.g, a contribution to a permanent exhibition provides an enduring benefit, or the sponsor buys capital assets such as racehorses or cars). ·         Expenditure not made wholly and exclusively for business purposes, or·         Expenditure which is specifically disallowed (such as any entertaining expenditure).  

Would this be classed as a capital asset with an enduring benefit???

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By pembo
11th May 2011 16:54

depends

If the vouchers were unsolicited and not part of the deal then there is in theory no marginal cost hence no benefit or disallowance.

If they were part of the deal then HMRC may argue that part of the sponsorship cost should be attributed to that element probably on the basis of what they are worth or if less the total cost. If the outing is for clients as well then that element may be disallowable as entertaining but may escape the P11d charge. If the outing is solely for staff/family then should be allowable but may get caught under the benefit rules unless exempt under the annual bash rules as I have argued successfully with HMRC that as long as less than £150 or whatever it is now you can have more than one bash.

Don't think there's any problem with this being capital expenditure as any advertsising could be construed to have an enduring benefit and things like yellow pages would be outlawed.

 

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By carnmores
11th May 2011 17:34

so under Pwepper v hart

whats the marginal cost , price of a tee?

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