We have recently converted our booking.com account to a business account as we book alot of hotels for our staff for business purposes.
As part of the conversion there is a 20% discount on booking.com standard rates and now staff are asking if they can book their personal accomodation via the work account to access the discount.
In my mind, this would be classed as a BIK?
Anyones thoughts?
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There is no cost to the employer - The employee will pay with their personal card when making the booking. Employer doesn't have to pay costs to booking.com
There is no cost to the employer - The employee will pay with their personal card when making the booking. Employer doesn't have to pay costs to booking.com
While since I looked at the legislation but struggling to see a benefit.
Is it within the terms of the use of the business account?
Just a bit of devilment on a hot day ... but would you therefore apply the same logic if an Employer (who paid for loads of business flights) gave the resulting Avios, or whatever, points to selected Employees (for their personal/family use)?
Those are points that are a discount for and redeemable against flights. A real cost. Employer gives away a thing that has value and could be used by the business.
Not the case for OP.
There was a recent thread on the reverse position of op using his airmiles for business travel.
Do not remember the consensus.
"Employer gives away a thing that has value and could be used by the business"
... true, but can't say I've seen them (the points) accounted for, with a value, on any employer's books?
The same as if I gave a lower mate-rate to my client's staff, that wouldn't be a BIK either.
Now if only there were a tax case on the BiK where a teacher at a private school got cheap schooling for his child as a benefit of his (the teacher's) employment. We could conflate this question with the vexed topic of VAT on school fees. :o)
Now if only there were a tax case on the BiK where a teacher at a private school got cheap schooling for his child as a benefit of his (the teacher's) employment. We could conflate this question with the vexed topic of VAT on school fees. :o)
Wouldn't the case be kinda the same as the usual treatment - dependent on what is the additional cost to the employer for supplying the child's school place ?
If the school fees paid is more than the additional cost - then there will be no BIK ?
... which is why all such 'schemes' that I've seen only offer a discount, not free schooling.
True it's usually a substantial discount (and varies from school to school and may depend on the teacher's earnings or at least degree of PT vs FT) - but they will all claim that the teacher/parent is still paying enough to cover any additional costs from supplying that child's place.
Although I did have to point out to one school that it was inadvisable to keep referring to this discount as one of the Benefits of employment (particularly when it came to negotiating pay rises)!
Wouldn't the case be kinda the same as the usual treatment - dependent on what is the additional cost to the employer for supplying the child's school place ?
It's the usual treatment precisely because there was a case such as Dib - maybe wryly - described. EIM21110.
If the school fees paid is more than the additional cost - then there will be no BIK ?
This is the point. It's not that the BIK rules don't apply, it's that the person supplying the benefit* makes a profit from so doing. A profit is not a cost, so there's nothing to tax.
BTW it's not "cost to employer", as suggested above. Statute (s204 discussed in that EIM extract) says "the expense incurred in or in connection with provision of the benefit" without any mention of who incurs the cost. Of course, it's normally the employer, but "cost to employer" is a dangerous simplification and there have been a couple of threads recently about (taxable) BIKs provided by someone other than the employer.
* Unlike FactChecker, HMRC have no difficulty with using this word and not meaning taxable BIK. EIM21704.
Spot on TD! Pepper v Hart. I remember going to a CIOT tax weekend prior to my exams where Mr Hart gave the after dinner speech on his case. :o)
My point ("that it was inadvisable to keep referring to this discount as one of the Benefits of employment (particularly when it came to negotiating pay rises)") could possibly have been better expressed.
It was deliberately in two parts ... both of which are capable of feeding any HMRC antennae tuned to the phrase "by reason of employment" - such as:
1st: when listed as one of the benefits, specific amount of discount on pupil fees, in employment offer letter (I kid you not);
2nd: referenced in subsequent pay review letter as part of the reason for being paid at the very bottom of available grade scale-points (inference that it is part of the remuneration package).
It is by reason of the employment. Why (how?!) would you argue otherwise?
If there is a choice between pay and discount... OpRA.
TD - "If there is a choice between pay and discount... OpRA"
Are you suggesting we make a song and dance about it?
I'll see myself out...
I was happy to leave the stage to TD for her conclusive aria ... but feel a reprise upon my lips:
"Referenced in subsequent pay review letter as part of the reason for being paid at the very bottom of available grade scale-points (inference that it is part of the remuneration package)"
... which they thought got around OpRA (as their HR had told them this was "the new Salary Sacrifice rules!") - and they claimed the reduced fees were simply an offer without connection to rate of salary paid.
[They might have got away with this in the private sector where salaries aren't so visibly tied to National grades & points, but then they aimed at their feet and pulled the trigger (by referencing the reduction during salary reviews)!]