PTX - why is this exempt from tax ?

topcattopcat Trusted RegularPosts: 452Registered
Hello all,

can not figure out why this one is exempt from tax anyone know ? :confused1:

"free tickets for all staff to attend a high profile athletics event sponsored by the employer. The tickets cost members of the public £25.."

thank you as always

Comments

  • Diddy MauDiddy Mau Well-Known Posts: 238Registered
    off the top of my head.....It will due to Sponsorship.
  • SandyHoodSandyHood Font Of All Knowledge Posts: 2,034Registered, Moderator
    Look at these 2:
    http://www.taxation.co.uk/taxation/Articles/2011/07/27/27352/benefit-game
    http://www.hmrc.gov.uk/helpsheets/hs207.pdf

    The first article gets bogged down.
    Here the scenario is something like an athletics event open to the public where the employer has paid to enable it to go ahead.
    There will be billboards and the programme will have a page advertising the firm. In other words the employer paid for marketing benefits.
    As a bonus the employer is given some tickets. This is ex-gracia and not why they sponsored the event.
    So what do they do with these tickets? Waste them? give them to customers? why not ask if there are staff members interested and give them the tickets?

    This is not a box with lunch at Man Utd where there is a free bar etc etc, it is a few tickets to go in the same grandstand as the public and enjoy a bit of athletics.
    The Goodwill Entertainment paragraph on the helpsheet spells out the criteria and the links to the relevant sections of the 2003 Act.
    Sandy
    [email protected]
    www.sandyhood.com
  • topcattopcat Trusted Regular Posts: 452Registered
    SandyHood wrote: »
    Look at these 2:
    http://www.taxation.co.uk/taxation/Articles/2011/07/27/27352/benefit-game
    http://www.hmrc.gov.uk/helpsheets/hs207.pdf

    The first article gets bogged down.
    Here the scenario is something like an athletics event open to the public where the employer has paid to enable it to go ahead.
    There will be billboards and the programme will have a page advertising the firm. In other words the employer paid for marketing benefits.
    As a bonus the employer is given some tickets. This is ex-gracia and not why they sponsored the event.
    So what do they do with these tickets? Waste them? give them to customers? why not ask if there are staff members interested and give them the tickets?

    This is not a box with lunch at Man Utd where there is a free bar etc etc, it is a few tickets to go in the same grandstand as the public and enjoy a bit of athletics.
    The Goodwill Entertainment paragraph on the helpsheet spells out the criteria and the links to the relevant sections of the 2003 Act.

    Thanks Sandy so if the reason for sponsorship is for marketing and not purposely for other befits it will be okay? but if they were sponsering to get other perks and not interested in the adverting this is where it can become taxable ?

    thank you
  • SandyHoodSandyHood Font Of All Knowledge Posts: 2,034Registered, Moderator
    Topcat your questions suggest to me that you have neither looked at or read either attachment:

    if the reason for sponsorship is for marketing and not purposely for other befits it will be okay? but if they were sponsering to get other perks and not interested in the adverting this is where it can become taxable ?


    Condition C is far more important. All staff can have free tickets - and most definitely not as a reward for work done or promised to be done
    ITEPA 2003, s 265says:
    ‘(1) No liability to income tax arises in respect of the provision of entertainment for an employee or a member of the employee’s family or household if conditions A to C are met.
    ‘(2) Condition A is that the person providing the entertainment is not the employer or a person connected with the employer.
    ‘(3) Condition B is that neither the employer nor a person connected with the employer has directly or indirectly procured its provision.
    ‘(4) Condition C is that it is not provided: (a) in recognition of particular services performed by the employee in the course of the employment; or (b) in anticipation of particular services to be so performed.
    ‘(5) In this section “entertainment” includes hospitality of any kind.’


    Sandy
    [email protected]
    www.sandyhood.com
  • topcattopcat Trusted Regular Posts: 452Registered
    SandyHood wrote: »
    Topcat your questions suggest to me that you have neither looked at or read either attachment:

    if the reason for sponsorship is for marketing and not purposely for other befits it will be okay? but if they were sponsering to get other perks and not interested in the adverting this is where it can become taxable ?


    Condition C is far more important. All staff can have free tickets - and most definitely not as a reward for work done or promised to be done
    ITEPA 2003, s 265says:
    ‘(1) No liability to income tax arises in respect of the provision of entertainment for an employee or a member of the employee’s family or household if conditions A to C are met.
    ‘(2) Condition A is that the person providing the entertainment is not the employer or a person connected with the employer.
    ‘(3) Condition B is that neither the employer nor a person connected with the employer has directly or indirectly procured its provision.
    ‘(4) Condition C is that it is not provided: (a) in recognition of particular services performed by the employee in the course of the employment; or (b) in anticipation of particular services to be so performed.
    ‘(5) In this section “entertainment” includes hospitality of any kind.’


    Hi Sandy,

    apologies i did checkly only scim it due to time constraints yesterday , i will have a proper look in a little while over all the info.

    Thanks for your help and further explanation appreciated as always
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