Reasons for trivial benefits

Apart from the obvious reasons what other reasons might there be for a trivial benet payment?

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I was just wondering what reasons, apart from very obvious like birthday, Christmas, etc., might there be for a trivial benefit? Any thoughts? I am talking about directors in a close company. There are no other employees.

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By Matrix
28th Feb 2019 22:18

Any amount that is not cash and is less than £50 but the total is less than £300 in a tax year?

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By MariaMaria
28th Feb 2019 22:31

Quote:

Any amount that is not cash and is less than £50 but the total is less than £300 in a tax year?


Not quite. Received the following comment from the tax man :"The benefit must cost you £50 or less to provide and must not be a reward for the work or performance of the employee or be contractual. You would therefore be expected to justify the reason why the directors are being given the £50 vouchers e.g. a birthday or Christmas. If there is no reason, we would assume they were a reward for their work and would not meet the criteria.
If the vouchers were a gift for an occasion such as a birthday, the limit of £50 would be exceeded if more than one voucher was provided for the single occasion. "
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By Matrix
28th Feb 2019 22:52

Are you the poster? If you think you already have the answer then why post a question, why not just share it? If you aren't the poster then it is my fault for answering an anonymous query which I don't usually do and you have been caught too.

They don't have to be vouchers.

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RLI
By lionofludesch
01st Mar 2019 07:32

England beating the Kangaroos, Cricket World Cup, MPs agreeing a Brexit Deal, Gwyl Dewi (topical), St Patrick's Day, St George's Day, St Andrew's Day, Ash Wednesday, Whitsunday - the list is endless.

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By Duggimon
01st Mar 2019 08:49

Happy first of the month, have £25 (x 12)

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By Tax Dragon
01st Mar 2019 10:12

The conditions appear simple: not cash or a cash voucher; cost £50 or less; not contractual; not in recognition of particular services; and, in the case of directors etc, not more than £300 per tax year.

But the “not contractual” and “not in recognition” tests bear thinking about. I am not an employment lawyer, but I believe there is something about that which is habitual becoming contractual – so I think the “happy first of the month” example might not hold good for very long.

The law doesn’t require a reason for the benefit, and it would be easy to represent HMRC’s request as wrong. But the point is very simple: if it’s neither contractual (or habitual) nor a reward, why are you, the employer, providing that benefit? That, to me, seems a fair question - and HMRC's assumption a fair one.

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By Ben Alligin
04th Mar 2019 10:33

Just read Tim Good's excellent article in Accounting Web 24/10/2016 it addresses all the issues.

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