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Iceland settles BIK dispute with HMRC

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8th Jan 2014
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Supermarket giant Iceland has settled a tax bill with HMRC regarding a business trip it had disputed was a tax deductible expense.

In 2013, Iceland boss Malcolm Walker took 800 senior staff on a £4m trip to Disneyworld in Florida.

HMRC deemed the trip a benefit in kind and issued a tax bill for £2.5m, but Walker had argued that the trip gave employees a chance to learn from Disneyworld employees and was therefore not for entertainment and a tax deductible expense.

But in a recent interview with the Telegraph, Walker revealed that he has since solved the issue with the Revenue and is "very happy with the outcome." 

According to Walker, HMRC made concessions after the company argued the investment value of the trip over the entertainment value.

“We do this to boost morale,” he told the Telegraph, “It’s not a holiday. We certainly haven’t been put off. We’re taking our managers to Dubai this year.”

HMRC refused to comment on the case, but issued the following general statement to AccountingWEB: “The rules say that when you benefit from something provided to you by your employer, there may be a tax charge. NICs might also be due. Anyone in doubt can use the guidance on our website to check the position.”

AccountingWEB members previously commented on the disputed benefit in kind business expense in May last year.

Taxwriter made the point that the story should have focused on the accountant who signed off “incorrect P11d forms”, while another wondered how HMRC arrived at the £2.5m figure.

Others, simply wondered what other reason “800 right-minded adults would like to go to Disneyworld?”

“They can only have gone to learn those customer service skills, so it's quite clearly "a course or other activity designed to impart, instil, improve or reinforce any knoweldge, skills or personal qualities... likely to prove useful to [them] when performing the duties of the employment." S.251 ITEPA 2003” Steve Kesby said.

“I’m surprised HMRC see it differently.” 

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By carroccio1958
13th Jan 2014 14:21

Michael E Y Mouse Marketing Associates says :
How dare you impugn by inference the mental vacuity of our clients who patronise our establishments worldwide in order to purely beguile themselves into a make - believe fantasy world for several hours with the sole objectives of shaking hands with people dressed as cartoon characters, engaging in activities which tangibly reduce their intelligence quotient and gorging on various offerings of junk food with a view to making themselves clinically obese !

We at Disneyland /World etc have NEVER condoned visits to our playpens based on the objective of acquiring any semblance of serious and/or work related exoeriences. These are anathema to our stated goals of enabling a make-believe nether world solely created in order to part the majority of our patrons with the maximum amount of money for the minimum effort.

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