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HMRC get things wrong, and taxpayers shouldn’t be afraid to question anything which doesn’t look right.
“The presenter of a HMRC seminar caused considerable amusement recently, claiming that giving bacon rolls to staff couldn’t be classified as a ‘trivial benefit’, but gifts of wine were fine”, says Brearley & Co Tax Manager, Andrew Cowe.
“In fact the cost of gifts provided to staff are classed as trivial benefits, and so non-taxable, providing they are within a £50 limit per gift, and are not cash or cash vouchers. Additionally, employees can’t be contractually entitled to them and they mustn’t relate to their duties, i.e. it should be a genuine gift”.
“As amusing as this was, the actual mistake is really beside the point”, continues Cowe. “The important thing to take from this is that taxpayers should never automatically assume what HMRC are saying is correct. They regularly get things wrong, and at times don’t seem to understand their own rules, as was the case here. As most of their “mistakes” appear mysteriously to be in their favour and not the taxpayer’s, you should always take professional advice if you are in any doubt.”
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Andrew Cowe, Tax Manager, Brearley & Co
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