I'm looking in as someone with some knowledge of income tax/employment tax and I think it looks wrong for the reasons I stated. It was more of a confirmation check.
What exact question would you be asking the client in this situation assuming the outsourced payroll provider is not giving advice.
Are you saying the £3,000 is paid to each employee outside of the payroll and then £250pm is taxed (and NIC hopefully) each payroll month.
Yes. My view is it should be taken through RTI when paid (currently a BACS payment). I think it gets the right answer over a year, but HMRC would argue RTI isn't being applied properly.
If the employee leaves before year end, employer has right to recover money which I would assume would be negative amount in the final payroll (subject to employment law considerations) which means they get the right gross/tax answer for the year too.
You are asking for a holding company to be removed. Usualy people are asking for one to be put in!
You sure you want to do this? Consortium relief is currently available which would not be otherwise. There may also be other "group" benefits such as SSE should one of the companies be sold.
Previously, this has been done on our gut feeling and estimated time taken on each client, as I didn't want to spend too much time recording time, if that makes sense?
What is wrong with this approach? Remember quality of life for staff will go down when there are timesheets involved due to stress of ensuring filled out sufficiently.
My answers
Apologies - I kept on cloudflare errors and i asumed it never went through!
If the payment left Nest on 31 March (ignore when received), why is client not entitled to it?
What is your reading of ITEPA 2003, s. 686(1)
Based upon HMRC guidance for eye tests I'd say it is a taxable benefit. If employer picks up directly tax free, if reimbursed then benefit in kind.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21765
I'm looking in as someone with some knowledge of income tax/employment tax and I think it looks wrong for the reasons I stated. It was more of a confirmation check.
What exact question would you be asking the client in this situation assuming the outsourced payroll provider is not giving advice.
It's not a loan as it's not repayable unless the employee leaves the business before year end.
Yes. My view is it should be taken through RTI when paid (currently a BACS payment). I think it gets the right answer over a year, but HMRC would argue RTI isn't being applied properly.
If the employee leaves before year end, employer has right to recover money which I would assume would be negative amount in the final payroll (subject to employment law considerations) which means they get the right gross/tax answer for the year too.
Yes they are exempt as long as trivial benefit
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21863 last paragraph
You are asking for a holding company to be removed. Usualy people are asking for one to be put in!
You sure you want to do this? Consortium relief is currently available which would not be otherwise. There may also be other "group" benefits such as SSE should one of the companies be sold.
Previously, this has been done on our gut feeling and estimated time taken on each client, as I didn't want to spend too much time recording time, if that makes sense?
What is wrong with this approach? Remember quality of life for staff will go down when there are timesheets involved due to stress of ensuring filled out sufficiently.