Taxation of Gifts

ste2901

If the board of directors in a limited company, vote to gift a vehicle to the members of the board as a bonus. What are the tax implications both for the company and the individual?

Thanks

Ste

yves

In my opininion a Bonus is taxable therefore the value of the car is taxable

payrollpro

Sounds like a transfer of asset to me. BIK value is cost to the company, pus any peripheral costs, less any contribution made by the recipient. To be honest, I'm not sure it's particularly cost effective because every cost incurred in obtaining and passing on the vehicle will be included and Section 1 on the P11D is a Class 1A NIC.

Also, how are they doing it? If they are purchasing the vehicles and then gifting them then it's section 1 but if the borad will be getting the vehicle and the company pays for it then you need to watch the process. If at any time the contract is between the supplier and the individual person with the company picking up the bill then it's section B, Payments made on behalf and thats class 1 NIC, not class 1A.

I would be very careful and find out exactly what process they will use and i would look carefully at the timeline as well.

Payrollpro