Employee tears suit...

Employee tears suit...

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Q1: An employee tears trousers on a sticking-out nail whilst visiting a client site and claims the repair cost from his employer. Assuming the employer agrees to pay, and does not pass the cost on to their client, will the employer get a corporation tax deduction and/or will the employee have a taxable benefit?

Q2 (I know the answer to this one): An employee, having put on some weight recently, tears trousers whilst bending over at client site and claims the repair cost from his employer. Assuming the employer agrees to pay, and does not pass the cost on to their client, will the employer get a corporation tax deduction and/or will the employee have a taxable benefit?

And...would it make a difference if the employee was a director of the company??

Thanks!

Replies (13)

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By johngroganjga
06th May 2015 18:46

Off the top of my head
1 yes and no
2 yes (because it is a BIK) and yes

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By Anne Robinson
06th May 2015 20:03

I'd be looking for a new replacement not a repair if it was me!

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By whatdoyoumeanwashe
06th May 2015 20:16

Perhaps not if the company was your own!
I also suspect a lot of large companies would refuse to pay such an "out of policy" expense. I remember having my claim for a new shirt, socks and pants refused, when I had worked straight through two nights running. Computer says no!

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By NHGlos
07th May 2015 08:53

Might depend on the situation

OP, is this an exam question...?

A medium sized company I worked for did allow someone to claim pants, socks and a toothbrush when they were unexpectedly away from home over night and the same company paid my hire car costs when I'd had an accident on the way home from a business trip. The P11d implications for the latter were relatively obvious, I think the £15 for the former got lost in the ether! A PLC I worked for after that allowed employees to claim for tyres punctured by nails on site, up to a maximum for a basic tyre.

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By johngroganjga
07th May 2015 09:31

The question ask us to assume

The question asks us to assume the employer will pay the amounts claimed. So this is not about whether a typical employee would do so, but about the tax consequences for him and the employee if he does.

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By JCresswellTax
07th May 2015 09:07

why ask Question 2

When you know the answer?

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By whatdoyoumeanwashe
07th May 2015 09:23

Not an exam question! Just work on my own so nice to be able to check I'm not going mad occasionally. I posed the second question to prove my thought that the cause of the damage is the critical factor.

On the occasion I mentioned, my shirt, socks and pants were rather more than £15, the TV Lewin next to the office being the only place I had the time to visit! The following week I had to cancel my holiday as a result of the same incident that caused me to work through the night. The company did pay for me to rebook it, but that was a BIK and they had to pay my tax and NI too. Quite rightly. Why they argued the toss about the shirt etc I'll never understand.

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Replying to lionofludesch:
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By NHGlos
07th May 2015 09:36

Fancy Pants!

Quote:
Not an exam question! Just work on my own so nice to be able to check I'm not going mad occasionally.
I only ask because together the questions are similar in style and content to lower level exam questions that require a general appreciation of tax practice - have you considered being an examiner, real life examples like this can make good questions?

Quote:
...more than £15...
I think his were Tesco! On the shirt etc. issue maybe the employer didn't consider you truly out of pocket - you'd spent the cash but got yourself a new shirt for yourself in the process...?
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Replying to In a Daze:
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By whatdoyoumeanwashe
08th May 2015 09:53

I was very much out of pocket.

NHGlos wrote:

Quote:
Not an exam question! Just work on my own so nice to be able to check I'm not going mad occasionally.
I only ask because together the questions are similar in style and content to lower level exam questions that require a general appreciation of tax practice - have you considered being an examiner, real life examples like this can make good questions?

Quote:
...more than £15...
I think his were Tesco! On the shirt etc. issue maybe the employer didn't consider you truly out of pocket - you'd spent the cash but got yourself a new shirt for yourself in the process...?

No, not thought of becoming an examiner! Clearly my off-the-cuff tax knowledge isn't good enough!

Yes, that was their argument re the shirt. What they failed to appreciate was that the circumstances which led me to have to work straight through two nights running were so horrific that I could never bring myself to wear them ever again!

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Replying to lionofludesch:
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By NHGlos
08th May 2015 09:58

I daren't ask

whatdoyoumeanwashe wrote:
...the circumstances which led me to have to work straight through two nights running were so horrific that I could never bring myself to wear them ever again!
I daren't ask!
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By Pelican
07th May 2015 09:32

A place I used to work in were giving away some free printers which the company were replacing. 

A co-worker went up to look at the printers. He then proceeded to turn the printer upside down which resulted in some printer ink falling out and onto his shirt. 

The very next day he put in an expense claim for a new shirt which the company actually paid. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and yes he did take a printer home as well. 

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By The Minion
07th May 2015 14:59

Oh the memories this question brings back...

We had an employee who not only broke the toilet seat (interesting entry in office accident book), but (sorry no pun intended) then sat on the A frame picnic table outside to recover from the shock and that collapsed. No we didn't pay for the plasters or the dry cleaning bill.

An ex partner did a better trick with the office printer. He was trying to replace the toner (which had a long thin plastic strip that had to be removed first) he pulled it too hard and the toner cartridge exploded all over him. He tried to get a replacement suit we said no, although it was really really difficult to say no because we could hardly breathe with laughing so much. 

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Replying to Red Leader:
By JCresswellTax
08th May 2015 09:33

Hilarious

The Minion wrote:

We had an employee who not only broke the toilet seat (interesting entry in office accident book), but (sorry no pun intended) then sat on the A frame picnic table outside to recover from the shock and that collapsed. No we didn't pay for the plasters or the dry cleaning bill.

An ex partner did a better trick with the office printer. He was trying to replace the toner (which had a long thin plastic strip that had to be removed first) he pulled it too hard and the toner cartridge exploded all over him. He tried to get a replacement suit we said no, although it was really really difficult to say no because we could hardly breathe with laughing so much. 

Don't you just love it when things like that happen.

I bet you still laugh out loud when you think about it :)

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