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Gifts to New Home Owners

T.C.T.C. Experienced MentorRegistered, Tutor Posts: 1,448
If a builder sends flowers to the purchaser of a new home, can he claim the cost of the flowers as an expense? :001_unsure:

Comments

  • DeanDean Experienced Mentor DevonRegistered Posts: 646
    The word 'gifts' should be answering your own question. Or alternatively, 'client entertaining'. I would show the cost in the accounts but add back on the comps.

    Regards

    Dean
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    You don't think it could be classed as advertising then?
  • DeanDean Experienced Mentor DevonRegistered Posts: 646
    Would the company logo(s), slogan(s) be on the flowers?

    I can see where you are trying to go with it but essentially it's just a goodwill gesture.

    Regards

    Dean
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Yes the company logo will be on the flowers - goodwill - yes, but advertising too!! This won't happen very often, so I think it must be worth trying for.
  • DeanDean Experienced Mentor DevonRegistered Posts: 646
    So the logo is actually on the flowers themselves? Are they artificial or something? :001_unsure:

    If you can satisfy the 'advertising' conditions, and the cost is below £50, then that should be ok - see here:

    http://www.hmrc.gov.uk/manuals/bimmanual/BIM45070.htm

    However, note the final line...
    The advertisement should be on the gift itself, and not just on the wrapping.

    That is where I think the expenditure fails to be allowable.

    Regards

    Dean
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Hi

    I agree with Dean, it is too remote.

    I get the same problem but more often with gifts of flowers to staff (weddings, birthdays and leaving), a benefit or not?

    Poodle
  • DeanDean Experienced Mentor DevonRegistered Posts: 646
    Poodle wrote: »
    I get the same problem but more often with gifts of flowers to staff (weddings, birthdays and leaving), a benefit or not?

    As per Section 201 ITEPA 2003

    Section 201(1) ITEPA 2003 concerns “employment-related benefits”.

    A benefit is defined in Section 201(2) as “ a benefit or facility of any kind”. When a benefit is provided to an employee (or to any member of his family or household (Section 721(5) ITEPA 2003) by reason of the employment ( EIM20501), it is an “employment-related benefit” (Section 201(2)).

    What this is saying is that a benefit-in-kind will arise if it is in connection with the employees employment. In other words the employee must have given something by way of services for the employer to give them a benefit.

    So in answer to your question I would say, no there aren't chargeable benefits but they also wouldn't be a specific deduction for the employer.

    You've got to love tax legislation! :001_tt1:

    Regards

    Dean
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Hi Dean

    This from HMR&C 480 Expenses & Benefits a tax guide

    Trivial benefits

    Strictly all benefits are subject to tax and NICs, unless there is a specific exemption. However,
    sensible practical administration of the tax system determines that benefits of a trivial nature
    (for example, a seasonal gift of a turkey or an ordinary bottle or two of wine) should not be charged
    as a benefit. Anything more lavish in quality or quantity remains chargeable.
    There is no monetary limit to determine what is a trivial benefit. A cash benefit, or a benefit with
    a money’s worth, is never treated as a trivial benefit.

    Depending on the value I have in the past treated as a 'staff benefit' but not a 'taxable benefit in kind' and allowed as tax deductable for the employer.

    Love tax? that's why I am concidering ATT:eek::eek:


    P
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Mmm. Dean. It satisfies all the criteria except for the bit about being on the item not the wrapping. Maybe I will leave this one out then. Thanks for all the advice.
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