Some employers may wish to give a small gift to their employees. As long as the employer meets the relevant conditions, no tax charge will arise on the employee. #A tax exemption is available which should help employers ensure that the benefits provided are exempt and do not result in a reportable employee benefit in kind. In order for the benefit to be exempt it must satisfy the following conditions:
the cost of providing the benefit does not exceed £50 per employee (or on average when gifts are made to multiple employees)
the benefit is not cash or a cash voucher
the employee is not entitled to the benefit as part of a contractual arrangement (including salary sacrifice)
the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties
where the employer is a ‘close’ company and the benefit is provided to an individual who is a director, an office holder or a member of their household or their family, then the exemption is capped at a total cost of £300 in a tax year.
If any of these conditions are not met then the benefit will be taxed in the normal way subject to any other exemptions or allowable deductions.
No more than £50
One of the main conditions is that the cost of the benefit does not exceed £50. If the cost is above £50 the full amount is taxable, not just the excess over £50. The cost of providing the benefit to each employee and not the overall cost to the employer determines whether the benefit can be treated as a trivial benefit. So, a benefit costing up to £50 per employee whether provided to one or more employees can be treated as trivial. Where the individual cost for each employee cannot be established, an average could be used. HMRC examples consider various gifts including turkeys, bottles of wine and gift vouchers.
Further details on how the exemption works, including family member situations, are contained in the HMRC manual.
However if you are unsure please do get in touch before assuming the gift you are about to provide is covered by the exemption.
Three years ago we help a local student to raise funds through sponsorship to help schools Tanzania.
Now we are looking to help another student who wants to help by volunteering his time in a Nepalese hospital next summer Here’s the story:
George who spent a year working for MGD before starting his Medical training is going to Nepal to work in a hospital next summer. The work is unpaid as Is his travel and subsistence for this part of his training. He has set up a fundraising page to help with the cost of his expense in providing this valuable support for the medical profession out in Nepal. He is also donating anything beyond his cost to the hospital fund where he is visiting. This fundraising is much needed.
The information about what he is doing and why is on the go funding page.
George is very interested in mountaineering and climbing and is an experienced skier having raced at international level from childhood.
He is undertaking this with two other medical students from Liverpool University. Each are responsible for self-funding and arranging the Nepalese hospital training themselves. On the basis of gaining experience and providing useful expertise in an area in which they see themselves progressing in the future. George is intending to work alongside Neuro and plastic surgeons already practicing out there. George has already spent time in Asia working in hospital having spent 2 weeks in 2016 working in a hospital in Thailand where he gained his interest in surgery.
We are helping George with his fundraising efforts by publicising this through our advertising channels including social media.
George will provide information and photos from his visit next summer.
But you can help George to achieve right now by visiting his Gofundme page
According to a report published by the Charity Commision, the majority of UK charities admit fraud is a major risk, but are still failing to carry out basic tasks in order to protect themselves.
More than 3,300 charities took part in the Charity Commission’s survey into fraud awareness, resilience and cyber security in the sector. Over two thirds of charities agree that fraud is a significant risk. Insider fraud is recognised as one of the biggest threats, the report stated.
The survey found that 85% of charities think they are doing everything they can to prevent fraud, but almost half do not have robust protections in place.
The Commission recommended some simple steps that charities could take to protect their funds, including introducing and enforcing basic financial controls. They should also make sure no single individual has oversight or control of financial arrangements, as effective segregation of duties is a crucial method of preventing and detecting fraud.
The Commission also recommends that employees, volunteers and trustees should be encouraged to speak out when they see something they feel uncomfortable about.
The government has abandoned its planned increase in probate fees. The increase in fees was originally expected to take effect from 1 April 2019. However, in March 2019 HMRC postponed the introduction of the increase, attributing the delay to pressure on Parliamentary time.
As part of the government’s plans, estates that are valued between £50,000 and £300,000 would have been subject to a probate fee of £250. Fees were to rise thereafter to reach £6,000 for estates with a value above £2 million.
Currently, for estates valued at over £5,000, a grant application made by a solicitor is subject to a flat fee of £155. A grant application made by an individual is subject to a fee of £215.
The increase was included in a statutory instrument (SI) however the SI fell away on the prorogation of Parliament in September, but was reinstated when the prorogation was declared illegal.
The government has now announced that the planned increase will not take place. Instead there will be a review of court costs and how they can be covered by the actual service required.
HMRC says it is clamping down on the promoters and enablers of tax avoidance schemes in the wake of the loan charge controversy.
Penny Ciniewicz, Director General of Customer Compliance at HMRC, told the Treasury Select Committee that HMRC is ‘doubling the resources’ to tackle those in the ‘avoidance supply chain’.
In response to questions about the loan charge, Ms Ciniewicz said:
‘We have more than 100 current investigations into promoters [and enablers], and we’re keeping a very close eye on the market for avoidance. We are spotting schemes as they emerge and we’re tackling them.’
The loan charge policy is currently subject to an independent review. It came into effect on 6 April this year, and applies to anyone who used ‘disguised remuneration’ schemes. The legislation added a 45% non-refundable charge on all loans advanced through the schemes, unless the individual had agreed with HMRC to settle their tax affairs.