Using gratuity to treat staff

No tax due?

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A customer has handed over a £500 cheque to a company as a 'tip' to all staff.

If the company banks the cheque, but then uses it to buy treats for the staff - below £50 each - presumably it falls within the trivial benefits rules and no tax/NI is due? I realise that if the employer simply gave the staff a share of the £500 each then tax and NI would be payable.

Replies (5)

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By Tax Dragon
08th Oct 2020 14:50

Your analysis probably stands up, so long as you don't look at the rules.

And this is Aweb. Rules, shmules.

(Plus, give me the cash, thanks. I'd rather decide how to spend it myself.)

Thanks (2)
Replying to Tax Dragon:
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By Ben McLintock
08th Oct 2020 15:11

Hey, if it's against the rules then it's against the rules. That's why I thought I'd bounce it off Aweb as I wasn't sure.

Plus, it's not my idea to spend it on treats - I'm just being asked if it's okay. I guess though it requires the company to technically retain the tips, which if it's not yet been legislated against (my Googling throws up proposals to outlaw it, but I'm not sure if it's yet been enacted), it's certainly frowned upon.

I'll just say share it among staff via payroll and deduct tax/NI.

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By frankfx
08th Oct 2020 15:59

How about this:

Staff kindly agree to reciprocate the gesture.

Donate £500 plus ? ! to a local charity.

Feelgood factor follows.

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By I'msorryIhaven'taclue
08th Oct 2020 16:43
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RLI
By lionofludesch
09th Oct 2020 07:31

How enthusiastic are the staff about this proposal?

How well are they paid ?

How much does their share amount to ?

Probably all more important questions. I can't get excited about tax and NI on a collective £500.

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