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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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.
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.
Fancy Pants!
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? Not an exam question! Just work on my own so nice to be able to check I'm not going mad occasionally.
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...? ...more than £15...
I daren't ask
I daren't ask! ...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!
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.
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.
Hilarious
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 :)