12th Oct 2016
Business | Tax
Is it time to go green?
Both you and your company could be better off with a Low Emission or Electric Car. If you buy a new car for your business that has CO2 emissions of 75 grams or less per kilometre (g/km) driven,or is electric, you can qualify for a 100 per cent first-year capital allowance. This allows you to offset the whole cost of the investment against taxable profits in the year. A car such as the Toyota Yaris Hybrid with emissions below 75 CO2 g/km only has 11% Benefit inKind.
A trivial perk is one that costs the employer no more than £50. From April 2016 employees are entitled to as many tax and NI exempt trivial perks as their employer is willing to give them. The limit for a director is a total value of £300 a year, including trivial perks to anyone closely connected with the director. The exemption does not apply to cash payments or vouchers that can be exchanged for cash.Neither does it apply if the perk was in recognition of services performed by an employee. If a group go out for a meal the rules allow an average value per head to be calculated. As long as the cost per head is £50 or less there is no taxable benefit. If the cost were £51 however the whole amount becomes subject to tax and NI, not just the excess over £50.
VAT on Tips:
VAT only applies where there is a supply and a consideration given. If you make a specific charge for service then it is vatable. If a tip however is voluntary then vat doesn’t apply. Make sure your till set up to distinguish between voluntary tips and mandatory service charges.