As the race itself is not related to charity, if an employer pays the entrance fee for their staff to enter, am i right in thinking this will draw a benefit in kind charge? The benefit for the charity element coming from gift aid on donations? It is optional whether you run for charity or not
I cant find any specific details on this type of race
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Employers' intentions
What was the employer's intentions, was it a "team building" exercise and available to everyone? Or was it the employer's intention to pay for the entrance fee instead of donating
Not a BIK
I cannot see how an employee doing a cross country run in their own time could possibly be a business expense. It will therefore be the settlement of a personal liability, which should be put through the payroll, rather than reported as a BIK on a P11D.
Perhaps, if the employee was wearing a top advertising the employer ...
Settling pecuniary liability
I agree with Euan. It has to go through payroll and employer will be able to claim a tax deduction for the expense (and associated NI) provided there was a business purpose for making the payment and most employers don't spend money unless there is some business purpose.
Alternatively, you could do a PAYE settlement agreement with HMRC.
Can claim it as staff welfare so allowable.
Some useful ideas above
Euan suggested advertisng via tabbards/t-shirts ( i think). I would accept that this would be advsertising so in view of "very flamboyant in how they spend their money on their staff and 3rd parties." You could suggest that the business buy some now.
Also Staff Welfare is another good suggestion.