I own a small limited company and have joined a golf club purely for business use i.e. playing with customers etc. I will not be playing at weekends. My question is can my limited company pay for this with no benefits in kind issues as its purely for business or must I show it as a benefit in kind on my salary package.
Jeff
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It depends........
Do you want to take the safe route which avoids rubbing the Revenue up the wrong way, and declare the membership as a benefit in kind each year, in which case the company will get Corporation Tax relief; or would you prefer to stand by the claim that it is wholly for the purpose of the business, and risk a protracted argument with the PAYE Inspector, even though you cannot claim the subscription for Corporation Tax purposes as it is likely to be seen as business entertaining?
Either way there is a tax charge attaching.
The Revenue are likely to contend that there is a "duality of purpose" so that the fact that you enjoy playing golf and thereby derive a personal benefit effectively overrides the business use.
Precedent
Wasn't there a tax case a few years ago when a bank manager tried to claim his golf club sub as a Sch E deduction? The claim was thrown out even though joining the club was a requirement of his employers.
If you've joined the club and the company pays, then the payment will be reportable on form P11d, and the payment subject to full Class 1NI, not Class 1A.
If the company has a corporate membership, then it's probably disallowable as entertainment. In those circumstances the Revenue may not seek to assess the employee, if the benefit is incidental. In the case of a golf club sub, I doubt that they would accept that!
Golf as Benefit in Kind
In the case stated below (The Bank Manager) in this case, the bank manager did not even enjoy golf but it was stil held that there was a duality of purpose for the golf club membership. This means that it will be impossible to say that the golf club membership is not a benefit in kind.