In order to win some business from a new customer can we ( Ltd Co ) offer the buyer a personal holiday ( value would be £1000+)?
I assume the actual cost of the holiday would be non deductable Co expense. But whould there be any other tax or legal issues??
Robert Guy
Replies (2)
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Think again?
Hi Robert - You are likely to find yourself responsible for establishing a "Tax Award Scheme" directly with HMRC's Incentive Award Unit before the arrangement is put in place, whereby you agree to be responsible for paying the tax & NI on this gift. It's different if you get the buyer's employer involved as they then take responsibility for some or all of this via PAYE and maybe settlement agreements.
Look up Tax Award Scheme & Incentive Award Unit on HMRC's website and I'm sure that within 10 minutes you'll opt to take them out for a Pizza!
Free gifts
Not sure about any legal issues but you are able to offer gifts to client/potential clients but any gift over £50 would need to be delaired for vat. The other side of this is that the gift is a form of incentive and can be classed as a promotion to the company concerned not sure how this effects a personal offer, could be seen as a bribe in some circles, but an incentive to the company.