#DidYouKnow you can buy small treats and gifts for yourself as a director and for your employees as a tax deductible expense AND not have to claim them on your P11D form as a benefit in kind?
Of course, we are talking about HMRC here, so there are some conditions:
Up to £50 per benefit
You can spend up to £50 each time you provide a benefit to yourself as a director or one of your employees. Make sure it doesn’t go even a penny over though, as the full amount will then become taxable for the employee/director as it will be deemed a normal benefit which would then have PAYE and NIC applied to it.
You also need to ensure it is an actual expense – there must be a receipt for the transaction – it isn’t a notional amount that you can claim when you feel like it.
Up to £300 per tax year for ‘close’ company directors
You can only claim up to £300 of trivial benefits (obviously in up to £50 chunks) per tax year as a director of a ‘close’ company. A ‘close’ company is any company run by up to 5 shareholders. Make sure you keep a record of the total – it would make sense to keep this with your payroll records as it does follow the tax year rather than the financial year of your business.
No cash or cash voucher
You can buy anything from a store-card voucher to a box of chocolate or a turkey for Christmas dinner to a bunch of flowers. But you can’t claim the cash or anything that can be exchanged for cash. As I mentioned above, you must keep the receipt for the transaction (as you would with any other transaction for your business!)
Not a reward for performance
It’s important to note that this gift/treat is exactly that, and it’s not a reward for performance.
Not in employment terms
You should ensure that the benefit you are giving is not in the employment terms anywhere, this benefit should not be contracted.
Some ideas for your treats!
I feel compelled to make a few suggestions on where you could get treats for yourself and your employees!
My VIP Card
My VIP Card is the countries fastest growing discount card and multi-award winning business. It provides an impressive array of cashback offers and discounts from both big name national chains as well as (and here’s the focus and raison d’etre for the business) discounts offered by a huge number of small local businesses. Maddy Alexander-Grout, the founder of My VIP Card, is passionate about supporting the #ShopLocal initiative and is keen to support the high street the best she can (and she’s doing a pretty awesome job if you don’t mind me saying!).
There’s two ways you could apply this for your business; one, you could buy a My VIP Card for your employee (as it’s well within your £50 limit), or two, you could use it to buy gifts for your employees.
=> Find out more information, and buy a card here: Buy a My VIP Card (disclaimer – I will get a small commission from you if you buy a card through this link, but I wouldn’t recommend it if I didn’t whole-heartedly recommend it!)
The Inspire Card
This is one for the ladies only (sorry gents!) – The Inspire Network is a networking group for business women in the UK. The Inspire Card is powered by My VIP Card, but there is a slight discount available to our full members. I own and lead the network with my business partner Nikki Tapley, and the network has been around for more than a decade (although not under our leadership for all that time!).
The membership itself is a valid business expense as it is for the benefit of the business rather than you as a director, but as a result of this membership, you do get access to the discounted The Inspire Card – which is a benefit!
=> Find out more and join us as a member here: The Inspire Network Membership
La Chocolatrice is an independent chocolate shop and workshop space, located in the heart of Newcastle. And it’s so yummy! They release a special treat box every Friday evening at 7pm and they sell out quick! These would make an awesome treat for your employees (or yourself…I’m going to have to be careful not to spend my entire £300 annual amount just on chocolate!) I’m sharing this link for the pure love of chocolate, BUT – you have to promise not to buy them all up, otherwise I’ll be sad if I can’t get them any more!
=> Check out the chocolate here: La Chocolatrice Chocolate Shop
Here’s the HMRC link for the official guidance => HMRC Tax on Trivial Benefits