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Employee tourist attraction visit

Allowable or P11D?

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A team of employees at a tourist attraction, as part of a strategy day, visited another attraction in the same sector for the day to explore how they operate.

At least, that's how it's been described - i.e. market research - an alternative view might be that it was an all-expenses paid jolly.

Which makes me wonder whether it should be treated as a P11D benefit.

Anyone else come across this?

Replies (32)

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By Accountant A
15th Jun 2020 18:22

'ph

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By Ben McLintock
05th Jun 2020 08:35

Essentially 3 employees went to experience a competitor's offering. Cost £300 in total, so above trivial benefit level. They are all customer facing, and would have benefitted from knowledge of the rival's offering.

But they certainly would have enjoyed themselves while there, so duality of purpose...

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Replying to Ben McLintock:
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By bernard michael
05th Jun 2020 09:00

Ben McLintock wrote:

Essentially 3 employees went to experience a competitor's offering. Cost £300 in total, so above trivial benefit level. They are all customer facing, and would have benefitted from knowledge of the rival's offering.

But they certainly would have enjoyed themselves while there, so duality of purpose...


Would you have a different opinion if they didn't enjoy themselves ? eg it poured with rain
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Replying to bernard michael:
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By Ben McLintock
05th Jun 2020 09:03

Haha, no. I guess some folk also enjoy training, but that's not a reason to tax them...

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By Tax Dragon
05th Jun 2020 09:30

Ben McLintock wrote:

But they certainly would have enjoyed themselves while there, so duality of purpose...

You mean, you would have enjoyed it had you been there. For these three it might have been a busperson's holiday.

Did you know that the word "duality" does not appear anywhere in the Company Taxation Manual? (I stand to be corrected, if you can find it.)

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Replying to Tax Dragon:
Psycho
By Wilson Philips
05th Jun 2020 10:47

Tax Dragon wrote:
Did you know that the word "duality" does not appear anywhere in the Company Taxation Manual? (I stand to be corrected, if you can find it.)

No it doesn't. But it does appear in the Business Income Manual, which is the more relevant guidance when considering basic computation of taxable trading profits for a company - CTM/CFM etc set out those provisions that are specific to companies.
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By Tax Dragon
05th Jun 2020 11:44

You are of course correct.

However this comes up time and time again in this forum, so I was trying to make the point in a novel way. (Possibly on the wrong thread, as we've not been told a company is involved... we've not been told a great deal.) And that point is that, whereas many folk appear to think that "duality" means "business and private/personal" [and I think the OP is one of those folk... personal enjoyment, ergo duality], companies don't experience joy, they don't have private/personal motives. (That I can think of, anyway... unless perhaps you include payments made at the wish of a director-shareholder for a personal reason.)

Companies may have duality of purpose in other ways, eg expenditure relating to both a trade and a property business, or itself and a related company. How many in here worry about the deductibility of such expenses? How many in here even think of it?

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By Tax Dragon
05th Jun 2020 06:39

I have seen similar, but, expanding on AA's point, similar is not the same. For example, one difference (based on the little you have told us) might be that in the case I have in mind the "jolly" was for all employees at a particular location; in your case it sounds like it was for a selection. I suspect I could identify further differences if you told us more.

As ever, the answers come from applying the rules to the facts.

PSA?

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Replying to Tax Dragon:
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By Ben McLintock
05th Jun 2020 08:24

Yes, was only 3 employees, all with responsibility for customer experience. So they'd have got something from it. But it just looks like a £300 day out.

Perhaps PSA is easiest route.

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By Tim Vane
05th Jun 2020 09:43

Allowable expense. No benefit.

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By Tax Dragon
05th Jun 2020 10:14

Somewhere between 50% and 100% right. So... a pass. (But in a real exam question, you'd be given enough information to answer it.)

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Replying to Tax Dragon:
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By Ben McLintock
05th Jun 2020 11:18

3 employees travelled to Alnwick Castle, paid admission price, took the tour, ate lunch etc to experience how they do things.

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By Tax Dragon
05th Jun 2020 11:42

How was their eyesight? (Did they drive themselves?)

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By Ben McLintock
05th Jun 2020 12:03

Ha, yeah - they drove to Barnard Castle but still weren't sure about their eyes so pressed on to Alnwick just to be sure...

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By Tax Dragon
05th Jun 2020 12:23

Someone saw someone coming. £300 a head to visit a castle?!

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By Accountant A
15th Jun 2020 18:22

'h'p

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By Ben McLintock
05th Jun 2020 13:00

£300 in total - for all 3 - including travel

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By jonharris999
05th Jun 2020 10:29

"wholly, necessarily, exclusively and unenjoyably"

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Replying to jonharris999:
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By Ben McLintock
05th Jun 2020 10:43

I think what I was trying to clumsily suggest was that it could be viewed as a treat, or a perk. Although not many would promote a competitor as a treat...

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Replying to Ben McLintock:
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By jonharris999
05th Jun 2020 11:56

Allow it. If challenged, go all the way to the Supreme Court to defend it. That in itself would also be an allowable and enjoyable day out.

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Replying to jonharris999:
Pile of Stones
By Beach Accountancy
08th Jun 2020 12:53

I've been to the High Court at the Old Bailey. Not an enjoyable experience...

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By AndyC555
08th Jun 2020 10:57

If it was for business purposes to suss out a competitor, you'd expect to see written reports setting out lessons learned. Are there any?

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Replying to AndyC555:
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By Ben McLintock
08th Jun 2020 12:21

Dunno - good question

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By Al G McC
08th Jun 2020 11:22

Did the employees report back on what they had learnt - i.e is there any documentation showing that it wasn't just a jolly but was in fact a genuine training event or similar?

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By timold
08th Jun 2020 11:32

FAM visits as they are called are extremely common in the industry and genuinely provide good insight into how other venues work. Was there any subsequent review or follow up of what they learnt on the visit? It's no different to any other strategic away day whatever the venue. Let's face it, if you work at a Visitor attraction you might even view it more of a busman's holiday than a freebie!

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By agknight
08th Jun 2020 11:42

You seem to feel that as someone works in the leisure industry its somehow taboo to enjoy oneself in competitor research.
I guess these individuals were paid for this time. I guess for enjoyment they would have preferred to visit with friends or family. I guess they did some kind of review of the visit.
I have found that it helps an employee to understand their own business, which they are blind to by direct familiarity, by experiencing a competitor.
I have clients who run fine dining restaurants. Are they supposed to hone their love of food by eating at home?
100% allowable.

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Replying to agknight:
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By Ben McLintock
08th Jun 2020 12:19

Maybe I am overthinking. Certainly, it's all about the customer experience, and for a luxury 5-star attraction to continue to command premium rates, the front line staff need to be familiar with what others are offering.

I guess I just want to be sure my reasoning is built on a solid, defensible foundation, as it is an area that HMRC could very well question.

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By Julian Stafford
08th Jun 2020 12:06

If the event was all of the following:

£150 or less per head;

annual, such as a Christmas party or summer barbecue;

open to all your employees;

it would be exempt. If not, i think it depends who went. Anyone from the marketing department should be OK but the finance department would be hard-pushed to demonstrate a business purpose. If there was a mixture of staff, it would be more difficult to justify the business purpose as there would be no valid reason for non-relevant staff to attend. Subject to the above, it sounds very much like a taxable benefit to me. Maybe imagine explaining it face-to-face to a hard-nosed HMRC compliance officer and see how plausible your explanation sounds.

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Replying to Julian Stafford:
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By the_drookit_dug
08th Jun 2020 12:15

It was all front-of-house staff, per Ben's earlier response.

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By C.Y.Nical
08th Jun 2020 12:55

My wife and I built a visitor attraction and ran it for 18 years. I agree that FAM visits are an essential part of such businesses, for two reasons. First, at the lower end of the scale, personal knowledge of other attractions enables staff to make recommendations to customers who often ask for comments and ideas about other places to go when they are staying in an area. We had an excellent relationship with other local attractions and fed each other business all the time. This is why reciprocal FAM visits are often arranged with free entrance, and free tickets are given to hotels, B&Bs, camp sites, etc. - not what happened here. The second reason is industrial espionage motivated by the hope that one will be able to pinch good ideas, which seems to fit your client's case. If it's a genuine FAM visit in paid time with some sort of outcome for the business, and the expenses were all necessary for the FAM visit, then it ought to be allowable. Purchases in the shop for personal use, or refreshments beyond the scope of a normal subsistence allowance, ought not to be claimed in my opinion.

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By ianthetaxman
08th Jun 2020 14:08

Wonder if the travel was via broomstick and that's why it was so expensive?...

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By Mr J Andrews
08th Jun 2020 16:56

Does Gareth Southgate's P11D show his trips around the country's top Premiership stadia ?
Of course not.

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