Is a very expensive company watch a benefit?

Is a very expensive company watch a benefit?

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Would it make a difference if he claimed to only wear it while working on company business and at no other time?
Doug Scott

Replies (6)

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By Richard Willis
22nd Dec 2006 08:10

I'm no tax expert, BUT...
Doug

Unless he's a professional diver who NEVER dives for pleasure I would guess he had no chance!!!

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By listerramjet
22nd Dec 2006 09:07

why do you call it a company watch?
Does it have a company logo on it? or is it simply something that the company has purchased? And why did the company purchase it?

Whilst I don't claim to know the legislation in enough detail to answer the question, I would expect it to be a BIK, and I would expect it to open a can of worms with HMRC.

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By andyjdicker
22nd Dec 2006 13:26

Points
'Some interesting points. Presumably if it was an expensive office clock which sat in the office that would be ok?'

That would probably be ok. It would be reasonable to expect that the clock was on the premises and used by the directors during their work.

A wrist-watch? No way. By it's very nature it is a personal item which is almost certainly going to be used personally by it's owner.

Yes, you could argue he only uses it during office hours, and yes it's for business use, but it's not a strong or reasonable arguement.

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DougScott
By Dougscott
22nd Dec 2006 12:40

What about a clock?
Some interesting points. Presumably if it was an expensive office clock which sat in the office that would be ok?

I guess the director's argument that it is a uniform in the sense that he needs to give the impression of success to his clients by wearing an expensive watch as well as an expensive suit. I thought John Birt at the BBC got away with claiming suits through his management company? Or do you think he was BIKed???

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By wdr
23rd Dec 2006 13:31

It's not just a benefit, but the gross cost including VAT is the
on which the benefit is chargeable, PLUS employer's NIC on the gross figure of benefit..
The benefit is 20% of the gross cost every year-but after 5 years the director can ben given the watch without further tax charge-unless the director is not the only shareholder when an IHT charge may be in point.
Simple recommendation-don't bother!!

On the question of an expensive clock in the office-I have seen a diligent inspector go for a taxable benefit on antique furnishings in an office.

Season's greetings.

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DougScott
By Dougscott
25th Dec 2006 11:15

What is a taxable benefit?
Well I think the watch will be posted to the director's account!

Of course all this talk of clocks and antique furniture begs the question where do you draw the line? Is having a very expensive hi-fi in the director's office so he can listen to music while he works a benefit or not? What about a cheap radio to listen to music for those who are tone deaf? Where is the cut and dried guidance on this? Why should something that is expensive and of quality be any more taxable as a benefit than something cheap (other than the fact that the taxman can't be bothered with cheap things but is fundamentally jealous of anyone who earns enough to get decent hi-fi and furniture for their office)?

Happy Christmas all!

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