Trivial benefits
Discussion
New accountant and using Xero all good. Previous accountant we would get vouchers/dinners/stuff up to £50x6 per director (no other employees) and these would go down as non-taxable benefit so i suggested adding"non taxable benefits" to Xero chart of account
New accountant - "you need to be very careful using trivial benefits because HMRC do look into them. HMRC expect them to arise from business trading, therefore if they can be directly linked to the running of the business this would be acceptable. If not, they would need to be put to the director’s loan account."
https://www.gov.uk/expenses-and-benefits-trivial-b...
Example for small co - https://www.gov.uk/hmrc-internal-manuals/employmen...
I cant see anything in the gov doc that says they thould be trading or business related so im confused!
New accountant - "you need to be very careful using trivial benefits because HMRC do look into them. HMRC expect them to arise from business trading, therefore if they can be directly linked to the running of the business this would be acceptable. If not, they would need to be put to the director’s loan account."
https://www.gov.uk/expenses-and-benefits-trivial-b...
Example for small co - https://www.gov.uk/hmrc-internal-manuals/employmen...
I cant see anything in the gov doc that says they thould be trading or business related so im confused!
Different accountants have different attitudes to risk. It's basically 'How lucky do you feel?'
Mine says you have to mention everything because HMRC already know it. My immediate response is 'If they already know everything then why are we wasting our time and my money doing a tax return?'
Mine says you have to mention everything because HMRC already know it. My immediate response is 'If they already know everything then why are we wasting our time and my money doing a tax return?'
cheeky_chops said:
New accountant and using Xero all good. Previous accountant we would get vouchers/dinners/stuff up to £50x6 per director (no other employees) and these would go down as non-taxable benefit so i suggested adding"non taxable benefits" to Xero chart of account
New accountant - "you need to be very careful using trivial benefits because HMRC do look into them. HMRC expect them to arise from business trading, therefore if they can be directly linked to the running of the business this would be acceptable. If not, they would need to be put to the director’s loan account."
https://www.gov.uk/expenses-and-benefits-trivial-b...
Example for small co - https://www.gov.uk/hmrc-internal-manuals/employmen...
I cant see anything in the gov doc that says they thould be trading or business related so im confused!
HMRC don't look into them. HMRC might review them if they were looking at something else, but they don't know if you've had trivial benefits in the normal course of business/your HMRC submissions. If an accountant is actually telling their client they shouldn't do the £50*6, then they don't really understand what they are. The whole point is that trivial benefits aren't linked to trading and the running of the business and should under no circumstances be linked to performance..!New accountant - "you need to be very careful using trivial benefits because HMRC do look into them. HMRC expect them to arise from business trading, therefore if they can be directly linked to the running of the business this would be acceptable. If not, they would need to be put to the director’s loan account."
https://www.gov.uk/expenses-and-benefits-trivial-b...
Example for small co - https://www.gov.uk/hmrc-internal-manuals/employmen...
I cant see anything in the gov doc that says they thould be trading or business related so im confused!
Terminator X said:
Surely HMRC just run an algorithm looking for any businesses not within certain parameters. There is no way they have real people looking through stuff, is there?
TX.
All accounts are coded now when they are sent to HMRC, so they have access to the data and variances as you note. They also have access to other systems such as property sale data. Reviews will be done manually as well. If they want to (high level fraud such as COP9) they can really can dig into some serious data. But the reality is HMRC is failing very badly and I'm sure a lot of people are aware and taking advantage.TX.
Surely the danger is if you are doing this routinely HMRC could seek to deem them remuneration rather than gifts.
Got to love the Government though, it's been £50 for a long as I can remember. I use it to buy staff a christmas present each year. It used to buy something decent, now it's little more than a box of posh chocolates.
Got to love the Government though, it's been £50 for a long as I can remember. I use it to buy staff a christmas present each year. It used to buy something decent, now it's little more than a box of posh chocolates.
MaxFromage said:
But the reality is HMRC is failing very badly and I'm sure a lot of people are aware and taking advantage.
And have been for a very long time. The number of tax investigations and tax enquiries is way down on what it was 20 years ago - precisely the opposite of what HMRC told us when Self Assessment was being introduced.Gassing Station | Business | Top of Page | What's New | My Stuff