Almost two in five small businesses in the UK are run by millennials, a major new study has revealed. Read More
Month: November 2019

Fall in number of arrests for tax evasion
According to industry figures, the number of people arrested in the UK on suspicion of tax evasion has reached the lowest level for five years. Read More

How to reward your employees this Christmas
Treating your employees over the Christmas holidays (or at any time, in fact!) is a tried and tested approach to building a strong relationship with your team.
But did you know you there are a couple of tax rules to adhere to when delivering these treats?
We want you to enjoy the holidays just as much as your team, so here’s some timely advice for staying on the right side of HM Revenue & Customs (HMRC) this Christmas.
Christmas parties
Colloquially called a Christmas party, the rules around parties relates to the total cost of 1 or 2 parties per year.
We have two types of party, one where only employees attend, and one where employees and their direct family (children, parents, siblings) or people who live at the same address as an employee attend.
Unfortunately, if anyone not meeting the above criteria, such as sub-contractors, or girlfriends / boyfriends of employees not living at the same address, this would mean the party, rather than qualifying as a Christmas party, would be entertaining, which means it would not qualify for VAT or Corporation Tax relief.
If your party meets the criteria above, all you need to do is make sure it costs less than £150 per attended (note attendee, not employee). If it exceeds this value, there would be additional PAYE charges.
Moreover, if the party is one where only employees attend, and it is less than £150 per attendee, you are also allowed to reclaim the VAT.
Gifts
Under PAYE rules, there are two types of gifts, trivial benefits, which do not incur any PAYE charges, and benefits in kind, which do.
So, to stay on side with HMRC, your gift should be a trivial benefit. To do this, all you need to ensure is:
- the gift is below the value of £50; and
- it isn’t cash or a cash voucher; and
- it isn’t a performance-linked reward; and
- it isn’t in the terms of the employee’s contract.
If the gift does not meet all the above criteria, it must be reported as a benefit in kind to HMRC and tax must be paid as appropriate.
An easy-to-understand example of a suitable gift
Your company decides to provide each of its employees with a turkey at Christmas. You have 10 employees and the total bill for the turkeys comes to £450.
Rather than calculate the value of each individual turkey, you can use the average cost, which is this case is £45 per turkey.
This means that the gift meets all the criteria above, making it a trivial benefit that does not incur any additional PAYE charges.
If the total cost of the turkeys had been £550, the average cost would have been £55, meaning the gift would have been a benefit in kind, not a tax-free trivial benefit.

IR35: HMRC loses £243,000 tax case
HM Revenue & Customs (HMRC) has lost a case against an IT Consultant that the tax body deemed liable for £243,000 in tax under the IR35 rules. Read More

A tax guide for SMEs
According to accounting software provider, QuickBooks, over 50 per cent of UK small and medium-sized enterprise (SME) owners have made a mistake when filing their VAT returns, while just a quarter (25 per cent) feel confident that they have filed their VAT accurately. Read More

How to avoid tax scams this Christmas
Did you know that last year, HM Revenue & Customs (HMRC) received almost 900,000 reports from the public about suspicious calls, texts and emails? Read More

Majority of employees uncomfortable discussing finances at work
According to the latest research, two-thirds of employees do not feel comfortable talking about their finances at work, despite more than a fifth of people struggling to make ends meet. Read More

Business owners hit by flooding granted “immediate relief” from business rates
Business owners hit by recent flooding will have “immediate relief” on their business rates, it has been announced. Read More

Millions at risk of being left behind by a cashless society
According to the latest research, cash usage is declining throughout the world, with credit/debit cards, bank transfers and eWallets becoming the most popular method of payment during the last year.

UK businesses could lose £195 million per day in workplace productivity
According to new research, the UK economy could lose £195 million per day in wages because employees are spending an average of 1 hour 24 minutes every day being unproductive. Read More