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Tax relief for shooting trophy

A client provided an annual party for his staff in the form of clay pigeon shooting tuition, followed by a competition. He provided a trophy for the winner of the competition, engraved with the company name and the winner's name. The winner will hold it for a year, then the competition will be held again next Christmas. I now see from his books that the trophy is an antique, for which the company paid nearly £600 plus another £100 for engraving. I am wondering if it is corporation tax deductible and also if it counts as a taxable benefit in the hands of the lucky winner. What do you think?


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There are two benefits

Firstly for all those that went to the clay pigeon shoot, there is a benefit on them being a proportionate share of the cost to the employer for laying on the event.  It doesn't fall within the exemption for annual parties and functions, because not being a party or similar function it doesn't satisfy the terms of the exemption.

You might though be able to argue that it's covered by the sports and recreational facilities exemption if it was a private event (not open to members of the public generally) and was available generally to (HMRC say all of) the employer's employees.

The trophy is an asset and the individual to whom it is provided has a benefit of 20% of the market value when first provided plus the cost of the engraving (£220 in total).

For the employer, the trophy is plant being used for the purposes of the employer's trade (to remunerate the employees) and is eligible for AIA.

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Market value of trophy

Don't forget that once engraved, a trophy loses a considerable proportion of its market value.  Far from the cost of engraving adding to the value as George suggests, if the trophy is silver, then the market value with engraving is likely to be close to the scrap value of the silver weight.  If it's a silver plated item, the market value with engraving is likely to be negligible.

A friendly antique dealer should be able to advise. 

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I do agree (in part)...

... although I had imagined that some sort of a base would be attached to the trophy that would have a plate attached to it on which the engraving would be made.

I wasn't suggesting that an engraving would add value.  Far from it.

The quantum of the benefit is 20% of the market value of the asset when first provided to ANY employee, plus the "additional expense" incurred (the engraving) in making the asset available to the employee.

For the first recipient, if the engraving took place before the trophy was made available to them, then the benefit is 20% of the market value of the engraved trophy as made available to them.

If the trophy was made available prior to the engraving being added, then the benefit is still 20% of the market value of the trophy when made available, pluse the cost of the subsequent engraving (an "additional expense").

For later recipients, the benefit is 20% of the appropriate market value used for the first employee, plus the cost of the engraving pertaining to that later recipient (an "additional expense").

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Are we sure about this?

Although I can't fault the logic of the posts so far, does letting the employee keep the trophy at home actually amount to providing them with an asset and therefore a benefit-in-kind?

What is the benefit exactly - The trophy is an inanimate object with no function (I'm not asking for suggestions - door stop, nut cracker etc) although I suppose the same argument could be made for art work etc (although this would not qualify for allowances unless the employer ran a hotel or similiar).




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It's placed at the employee's disposal...

... they can urinate in it after church on Sunday if they so wish.

You're coming from the wrong direction.  You start with "has the employee been provided with a benefit or facility of any kind" by reason of their employment?

I think they have.

Then you ask "what is that benefit" in order to determine the appropriate tax treatment.

In this case an asset has been placed at the employees disposal (the test of S.205) without any transfer of property in the asset.

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I'm sure you are right but

It seems to me that the reason the employee has ended up with the trophy is that he happened to be the best shot within the party of his collegues who attended the event. Assuming no corruption was in evidence, the neither the the employer or the employee had control over who won and therefore received it - This must be relevant to determining if it came by way of his employment.

Secondly, I am assuming that we are assuming that the employee takes the trophy home to put on the mantlepiece (or urinate in as suggested - we use pots up here but each to their own). Presumably if the employee leaves it on his desk at work then no benefit-in-kind exists as it has not been placed at the employees disposal?

The employee has not "won" the actual trophy but the right to display it for 12 months.  

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Deeming provision

I agree that the benefit of having the trophy doesn't actually arise by reason of the employee's employment, but by reason of the particular employee's particular skill at blasting little pottery discs.

However, the trophy is provided by the employer and so the deeming provision in S.201(3) applies deeming any benefit to be by reason of the employment.

Even if the trophy sits on the employee's desk at work, it's still at their disposal.  The computer, hole punch and stapler on their desk are assets placed at their disposal which is specifically exempted from charge by S.316 (accommodation, supplies and services used in employment duties).

If the employee were to use the trophy for the purposes of their employment with private use that wasn't significant, it too would be exempt.

Incidentally, I had a case where an employer provided certain employees with charity vouchers (a voucher with a set monetary amount that could only be donated to charity).  HMRC advised, and I was inclined to concur, that that was a (feel good factor) benefit.  I think the trophy's also a (feel good factor) benefit.

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Ah, so if we call it a paper weight

George Attazder wrote:

The computer, hole punch and stapler on their desk are assets placed at their disposal which is specifically exempted from charge by S.316 (accommodation, supplies and services used in employment duties).

If the employee were to use the trophy for the purposes of their employment with private use that wasn't significant, it too would be exempt.

Then problem solved.


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... it might be better to use it as a paper weight, rather than simply refer to it as a paper weight.

Obviously urination would need to be redirected to a suitable pot.

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Thanks for all your illuminating comments! The shooting event was not open to the public, and was available to all employees so I agree that the sporting or recreational facilities exemption applies. A couple of the employees - including the winner - took shooting lessons before the event but since all employees could have done that if they'd wished, I don't feel that it constitutes corruption!

The winner is keeping the trophy on her desk at work. I think I shall recommend that she keeps her stapler inside it, and her paperwork under it - problem solved!

Many thanks for your help.

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Are you saying...

... a female won? Perish the thought!

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I'm not sure I should even respond to that! But actually I think all competitors were women...

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Success by default. That explains it! :)

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A most amusing post !

Judging by the detailed comments, I cannot be the only one to have finished all the tax returns !

Moi, I'd just claim AIAs on the cup and forget the benefit aspect, if any - I think it would be an extremely nit-picky inspector that would run with that one. But ok, put the cup on display in reception then all could see the lady's name, all the more impressive as visitors wouldn't realise it was an all-woman team !

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