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Claiming Input VAT on Director meals

I am a director, can I claim VAT on my lunch?

Yes, as directors are classified as employees of the business (Notice 700/65 para 2.3) you can recover VAT on lunch.

But as always there a few pot holes down this road to be aware of:

  • Subsistence – A meal taken away from normal place of work on a business trip is allowable.
    (Notice 700 para 12.1.2)

As a guideline, a claim should not be a problem if the business meeting is at least five miles away from the main trading base.

So a meal ordered to your office for lunch is not allowable.

  • Business Purpose – You cannot recover the VAT on meals which are not taken for business purposes (Notice 700 para 12.1.2)

Unfortunately, keeping the director’s tummy full is not a business purpose.

 

  • Exclusive – If the entertainment is provided only for directors or partners of a business the VAT incurred is not input tax. This is because the goods or services are not used for a business purpose. The VAT cannot, therefore, be recovered (Notice 700/65 para 3.2)

Thus, if meal is ordered for director only and not for other staff as well, Input VAT cannot be claimed.

Conversely, VAT can be claimed for employee entertainment like Christmas party when all employees including directors can attend it. Also there is no monetary cap on it.

See also Neil Warren article mentioned below on a planning tip – a small charge for guests.

 

Thus in conclusion, it’s better to avoid claiming Input VAT on meals for directors, unless it can satisfy the above conditions, which in our opinion is a high threshold to cross.

 

Sources:

 

Automatic Pension enrolment for a new employer

Simple step by step guide for automatic pension enrolment for new employer

Things needed:

  1. PAYE reference number i.e. first need to register as an employer with HMRC.
  2. Staging date: date when first member of staff starts work.

 

Next:

  1. Choose a pension scheme
  2. Write to staff: use pension regulator’s draft letters.  See note 1 below
  3. Declare compliance to pension regulator.

 

Note:

1. Currently we use Moneysoft payroll manager and send Postponement letter to all staff.

2. Tax relief on pension: Relief at source or net pay

3. Employee often ask – How do i transfer my old pension to the new employer?

3. Please use pension regulator’s website for more information. http://www.thepensionsregulator.gov.uk

 

HMRC Talking Points : Statutory Maternity Pay

Webinar on SMP included in this blog post

I recently attended a HMRC webinar and later HMRC sent me an email with lots of useful information, which i have added to this blog for future reference:

Here are the web links:

Statutory Maternity Pay and Leave: employer guide
https://www.gov.uk/employers-maternity-pay-leave/entitlement

Statutory Paternity Pay and Leave: employer guide
https://www.gov.uk/employers-paternity-pay-leave

Maternity and paternity calculator for employers
https://www.gov.uk/maternity-paternity-calculator

Get financial help with Statutory Maternity and Paternity Pay
https://www.gov.uk/recover-statutory-payments/if-you-cant-afford-to-make-payments

Acas
http://www.acas.org.uk/index.aspx?articleid=1461

Webinars, e-learning and recordings for employers
https://www.gov.uk/government/news/webinars-emails-and-videos-on-employing-people

If you have questions about statutory payments, please post them on the PAYE and payroll for employers section of HMRC’s online customer forum
https://online.hmrc.gov.uk/webchatprod/community/forums/list.page

Please send your questions, comments and feedback to: no-reply@hmrc.gov.uk.

Watch Recording

Auto- enrolment: Different types of workers

Type of employee for auto-enrollment

Auto- enrollment: Different types of workers

Restaurant trade has a high turnover of staff. Every month while doing payroll I come to the question about different types of worker in auto-enrollment. I cannot seem to remember and have to google it. I thought better to put a simple guide on my own website to look it up when I need it next time. I was searching for it over the internet and found the beautiful exhibit below prepared by the Pension regulator.

 

Restaurant-trade-autoenrolment

 

It reminds me of an old saying – good artists copy, great artists steal!

 

Source:
Pension regulator

Key Budget 2018 Highlights for Restaurant Trade

A summary of key changes.

  • Minimum wage: From April 2019 the National Living Wage will increase from £7.83 an hour to £8.21. An increase of 38 pence, an above inflating increase of 5%.

 

  • Personal Allowance will rise from 11,850 to £12,500 from April 2019 and will remain the same in 2020.

 

  • Higher Rate Threshold will increase from £46,350 to £50,000 in April 2019

 

  • Duty on beer, cider and spirits remains frozen.

 

  • Annual Investment Allowance will increase from £200k to £1 million from 1 January 2019 and will remain at this level till 31 December 2020.

 

  • New Capital allowance (Structure and building allowance): Relief will be provided on eligible original construction costs incurred on or after 29 October 2018, at an annual rate of two percent (flat rate) on a straight-line basis off their profits before they pay tax.

 

  • Business rates: Business rates will be cut by a third for two years for shops, pubs, restaurants and cafes in England with a rateable value of £51,000 and under.

 

 

Other interesting points:

  • 2% digital services tax on large digital firms

From April 2020, large social media platforms, search engines and online marketplaces will pay a 2% tax on the revenues they earn which are linked to UK users.

 

  • Non-resident landlord companies

From 6 April 2020, non-UK resident companies that carry on a UK property business, or have other UK property income, will be charged to Corporation Tax, rather than being charged to Income Tax as at present.

 

  • Annual Capital Gains allowance increases to £12,000 for individuals.

 

Source:

Budget 2018