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Where Taxpayers and Advisers Meet

Trivial benefits

Incredulum
Posts:2795
Joined:Thu Dec 03, 2009 5:35 pm
Trivial benefits

Postby Incredulum » Mon Nov 26, 2018 1:58 pm

A trading company has no employees, but a shadow director and his partner (girlfriend) do all the work. Ignoring minimum wage issues, what, in practice is the approach taken with regard to trivial benefits.

If the two of them go out for dinner, total cost £110, can they claim £100 under the trivial benefit rules?

Thanks

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Trivial benefits

Postby bd6759 » Tue Nov 27, 2018 1:42 am

No, It cost more than £50 per head to provide.

Incredulum
Posts:2795
Joined:Thu Dec 03, 2009 5:35 pm

Re: Trivial benefits

Postby Incredulum » Wed Nov 28, 2018 12:01 pm

Thanks. Did it cost the company more than £50 though?

https://www.gov.uk/expenses-and-benefits-trivial-benefits

"You don’t have to pay tax on a benefit for your employee if all of the following apply:
it cost you £50 or less to provide"

The individual submits an expenses claim to the company, restricted to £50. Therefore it has not cost the company over £50 to provide.

This contrasts with the guidance for the Christmas/annual parties which is very clear on this point.

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21691

"The £150 is not an allowance to be set against an amount that exceeds that figure."

Which is of course a bit silly, as if you have an event that costs £150 for dinner, and your employees pay for extra drinks on top from a cash bar then it has been treated as an allowance of £150.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Trivial benefits

Postby bd6759 » Thu Nov 29, 2018 1:15 am

If the individual pays it and gets reimbursed, the company is making a cash payment to the employee. This is not a trivial benefit.

Incredulum
Posts:2795
Joined:Thu Dec 03, 2009 5:35 pm

Re: Trivial benefits

Postby Incredulum » Fri Nov 30, 2018 3:20 pm

Thanks.

So trivial benefits only count under the legislation if they are paid on the company credit/debit card or by company cheque, but not if:

1. the senior member of staff present takes all employees out for lunch and pays on his own credit card and reclaims it.
2. petty cash is given to the individual who goes out for lunch and then submits a receipt.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Trivial benefits

Postby bd6759 » Fri Nov 30, 2018 11:32 pm

That's not what I said.

There are rules that apply, and one is that it must not be cash or a cash voucher.


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