Cash inducements

Cash inducements

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My client is a market research company.It pays cash inducements to members of the public if they attend one of its focus group meetings,small amounts between £20 and £50 per person. Payments total around £5k per annum.The only record is the name of the payee.
My questions are:

1)Should paye/nic be applied ?

2)If not, should the amounts be reported on a P11D ?

3)If so,what are the chances of a dispensation ?

4)Should my client simply request the recipients sign a receipt that they have received a payment, and it's up to them to declare it ?

5)Presumably it's an allowable expense in my client's accounts, as without such cash inducements there would only ever be one attendee - my client !
MP

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By User deleted
01st Oct 2004 16:08

payee not an employee
The payee is not an employee, it would appear. Neither is the payee self-employed. PAYE does not apply I believe, and the individual is usually not entering such a transaction with an expectation / motive of profit, most probably. Possibly taxable under Sch. D case 6 as sundry income, but I do not personally think it is taxable in the UK.

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