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deductable expsenses

Discussion in 'Accounts & Finance' started by 8Abs, Feb 8, 2018.

  1. 8Abs

    8Abs UKBF Newcomer Free Member

    13 0
    Hi All.

    Not sure if this is the right section to post this question, so admins feel free to move.

    I currently run a welbeing and fitness company and want to offer my services to the corporate market.

    I want to know if the companies i offer my services to are able to put the costs against their tax. How much they are able to off set.

    Say i charged £300 per employee of the company, could the company put the whole amount as a company expense?

    any thought are very welcome.
     
    Posted: Feb 8, 2018 By: 8Abs Member since: Dec 23, 2015
    #1
  2. SteLacca

    SteLacca UKBF Enthusiast Free Member

    778 150
    They could, but it would be a benefit in kind for the employees, giving rise to a personal tax liability for each of them, and a Class 1A NIC liability for the company (subject to the trivial benefits exemption)
     
    Posted: Feb 8, 2018 By: SteLacca Member since: Jun 16, 2016
    #2
  3. 8Abs

    8Abs UKBF Newcomer Free Member

    13 0
    tried to read about this but just confused me more.

    I have read in the past about schemes for companies to provide health and welbeing for their employees.

    So if a company was to hire my services to provide certain products/services to their employees (the company foot the cost) are you saying that each employee would have to pay extra tax and the company would be able to off set my costs on the companies tax

    i think im confusing myself now
     
    Posted: Feb 8, 2018 By: 8Abs Member since: Dec 23, 2015
    #3
  4. SteLacca

    SteLacca UKBF Enthusiast Free Member

    778 150
    Yes, the employees incur a personal tax liability, and the company gets corporation tax relief, though as I mentioned, the company will also incur a Class 1A NIC liability charged at 13.8% of the total value of the benefits in kind.
     
    Posted: Feb 8, 2018 By: SteLacca Member since: Jun 16, 2016
    #4
  5. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,507 854
    Why does the tax situation of your client matter to you?
     
    Posted: Feb 8, 2018 By: STDFR33 Member since: Aug 7, 2016
    #5
  6. TheCyclingProgrammer

    TheCyclingProgrammer UKBF Regular Free Member

    827 177
    You don’t need to worry yourself about this. Yes, the client will be able to deduct the costs of providing the benefit to their employees when calculating their corporation tax bill.

    If it’s treated as a BIK then the employer and employee may have extra tax to pay on the benefit, but that’s not really your concern. It’s for your clients and their employees to decide whether the benefit is worthwhile.
     
    Posted: Feb 8, 2018 By: TheCyclingProgrammer Member since: Jul 15, 2014
    #6
  7. CaMaNo

    CaMaNo UKBF Contributor Free Member

    40 6
    I assume it's part of the pitch to sell to corporate clients.
     
    Posted: Feb 8, 2018 By: CaMaNo Member since: Oct 18, 2017
    #7
  8. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,507 854
    As do I. I just find it a rather pointless sell point to prospective clients that you want to pay £300 per employee.
    Clients that are willing to pay that aren’t bothered about the tax consequences of doing so.
     
    Posted: Feb 8, 2018 By: STDFR33 Member since: Aug 7, 2016
    #8