Are you stressed about Black Friday and Cyber Monday? Reply

Surprised OMG shocked woman

Christmas is coming, its time to buy presents and that means Black Friday (Friday 25th November 2016) and Cyber Monday (Monday 28th November 2016).

It’s a frenzy of present buying!

Last year UK shoppers spent £3.3 billion between Black Friday and Cyber Monday, Amazon reported selling 7.4 million items on Black Friday 2015 and £968 million was spent on Cyber Monday.

black-friday

In 2005, Shop.org coined the term “Cyber Monday” after analyzing increased Internet traffic and sales on the first day that most people return to work after the holiday weekend.

Since its inception, online consumers have started to spread the word about Cyber Monday. Between 2006 and 2011, online sales doubled to over 1.2 billion dollars on Cyber Monday. The success of Cyber Monday has made itself known all around the world, including Canada, the United Kingdom, and all over Europe.

Are you ready to spend spend spend! buy buy buy!

steve@bicknells.net

Are Gift Vouchers a waste of money? Reply

Christmas Gifts

As much as £300 million worth of gift vouchers bought in 2014 were unspent according to research by the UK Gift Card and Voucher Association (UKGCVA).

Every year 6% of vouchers bought by consumers go unused as they lay forgotten in people’s wallets and drawers.

In 2013 some £2.5 billion worth of gift cards and vouchers were sold in UK retail stores as gifts and £2.25 billion were purchased by businesses as staff or customer rewards. Meanwhile a UKGCVA report shows that in the third quarter of 2014, the gift card and voucher industry grew by 10%. The UK industry as a whole is now worth £5 billion.

Modern technology may provide the answer as digital vouchers, such as those that can be loaded on to a mobile phone, are becoming more popular according to the UKGCVA, and may be more likely to be used because the recipient does not have to remember to take a physical piece of plastic or paper with them to the shops.

Unfortunately, vouchers are a taxable benefit in kind

Vouchers that can be exchanged for cash

These vouchers count as earnings, regardless of who gives the voucher to your employee, so you’ll need to:

  • add their value to the employee’s other earnings
  • deduct and pay PAYE tax and NICs through your payroll
  • report any NICs for the pay period when the last payment is made in the same period

Vouchers exchangeable for goods and services only (non-cash vouchers)

Add the cost of the vouchers to the employee’s earnings – unless they’re luncheon or childcare vouchers. For these, use the voucher’s face value.

Non-cash vouchers that are exempt from NICs

These include vouchers for:

  • travel between home and work on a work bus
  • social functions, such as a Christmas party, up to £150 per head
  • childcare vouchers up to a certain amount

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/426508/CWG2__2015_.pdf

Generally, there is no VAT on purchased gift vouchers as they are treated as cash equivalents, its only when they are used to purchase items that VAT needs to be accounted for.

But some vouchers can be subject to VAT as explained in this UKGVCA fact sheet

steve@bicknells.net

Contact Us

10 crazy Christmas accounting facts 1

Been Naughty?

It’s nearly Christmas, but did you know….

  1. While millions of people are exchanging presents, feasting on turkey, and nodding off in front of the television, 1,600 people are expected to take time out from the yuletide festivities and do their tax return online
  2. If your employer spent more than £150 per head on parties you could be facing a tax bill in the new year
  3. If you are given third party gifts (suppliers) worth more than £250, then you could he taxed on them
  4. An employer may provide employees with a seasonal gift, such as a turkey, an ordinary bottle of wine or a box of chocolates at Christmas. All of these gifts can be treated as trivial benefits.
  5. Shoppers spent £1.2bn on ‘Panic Saturday’ (20th December 2014)
  6. Christmas Shoppers will spend £74bn in 2014 and of this £17.4bn will be spent online
  7. From 2016, employers will be able to give employees tax-free “benefits” – not cash – of up to £50 a year.
  8. HMRC will not be holding any Christmas Parties for its staff according to the Telegraph
  9. Many people think Scrooge was an accountant but he was actually a moneylender
  10. There is no VAT on purchased gift vouchers as they are treated as cash equivalents, its only when they are used to purchase items that VAT needs to be accounted for.

Have a great Christmas

steve@bicknells.net

Are you selling online? 20% more will be sold online in 2014 Reply

dreamstimefree_111433

Last year in was reported by BBC News….

A record amount of online shopping was done in December 2013, says the British Retail Consortium (BRC).

Close to one in five non-food items was bought online last month.

There was also a 19.2% growth in internet purchases from a year earlier, the fastest increase in four years……..

According to Law Donut….

Online sales in the run up to Christmas this year are expected to grow by 19.5% over 2013, with UK shoppers expected to spend £17.4 billion online.

Total Christmas sales are predicted to reach £74.3bn according to research conducted by the Centre of Retail Research for RetailMeNot, with the average UK household spending £775 on all of their Christmas shopping.

Are you trading online? do you have a website? do you have an App?

steve@bicknells.net

How to have a tax free Christmas 6

the unlike trio 01/Devil, Angel and Santa celebrating Xmas

Christmas Parties

·         HMRC have an Exemption (not an allowance) of £150.

  • available to employees generally or
  • available to employees generally at one location, where the employer has more than one location.

·         If the employer provides two or more annual parties or functions, no charge arises in respect of the party, or parties, for which cost(s) per head do not exceed £150 in aggregate.

The figure of £150 is not an allowance. For functions that are outside the scope of the exemption (see example at EIM21691) directors and employees, except those in an excluded employment, are chargeable on the full cost per head, not just the excess over £150, in respect of:

  • themselves and
  • any members of their family and household who attend as guests.

The cost of the function includes VAT and the cost of transport and/or overnight accommodation if these are provided to enable employees to attend. Divide the total cost of each function by the total number of people (including non-employees) who attend in order to arrive at the cost per head.

Christmas Gifts from suppliers to employees

Certain gifts from third parties are tax free if all these conditions are satisfied:

• the gift consists of goods or a voucher or token only capable of being used to obtain goods, and

• the person making the gift is not your employer or a person connected with your employer, and

• the gift is not made either in recognition of the performance of particular services in the course of your employment or in anticipation of particular

services which are to be performed, and

• the gift has not been directly or indirectly procured by your employer or by a person connected with your employer, and

• the gift cost the donor £250 or less, and

• the total cost of all gifts made by the same donor to you, or to members of your family or household, during the tax year is £250 or less.

Some other gifts are not taxable. If you earn at a rate of less than £8,500 a year and you are not a director, a gift to mark a personal occasion, such as

a wedding present, which is not a reward of your employment, is not taxable. If you earn at a rate of £8,500 a year or more, or you are a director,

any gift from your employer is taxable unless your employer is an individual and makes the gift in the course of family, domestic or personal relationships.

Seasonal gifts from Employer to Employee

An employer may provide employees with a seasonal gift, such as a turkey, an ordinary bottle of wine or a box of chocolates at Christmas. All of these gifts can be treated as trivial benefits. . For an employer with a large number of employees the total cost of providing a gift to each employee may be considerable, but where the gift to each employee is a trivial benefit, this principle applies regardless of the total cost to the employer and the number of employees concerned. If a benefit is trivial it should not be included in a PSA (EIM21861).

If the gift extends beyond one of the items mentioned above, for example from a bottle or two to a case of wine, or from a turkey to a Christmas hamper, you will need to consider the contents and cost before being able to determine whether the benefit is trivial.

PAYE Settlement Agreement (PSA)

For practical purposes it may be that small cash and money’s worth benefits can be included in a PSA.

PAYE Settlement Agreements (PSA’s) are requested by Employers and subject to agreement with HMRC. Under this agreement the employer will be responsible for accounting for any tax and national insurance liabilities arising. Any items covered by a PSA will not need to be shown on forms P35 and P11D at the end of the tax year.

steve@bicknells.net

Will the Christmas Party be tax free? Reply

the unlike trio 01/Devil, Angel and Santa celebrating Xmas

The answer is probably! maybe?

HMRC have an Exemption (not an allowance) of £150.

If the employer provides two or more annual parties or functions, no charge arises in respect of the party, or parties, for which cost(s) per head do not exceed £150 in aggregate. Where there is more than one annual function potentially within the exemption, we do not expect employers to keep a cumulative record, employee by employee, of functions attended. But for each function the cost per head should be calculated. The cost per head of subsequent functions should be added. If the total cost per head goes over £150 then whichever functions best utilise the £150 are exempt, the others taxable (see examples at EIM21691).

The figure of £150 is not an allowance. For functions that are outside the scope of the exemption (see example at EIM21691) directors and employees, except those in an excluded employment, are chargeable on the full cost per head, not just the excess over £150, in respect of:

  • themselves and
  • any members of their family and household who attend as guests.

The cost of the function includes VAT and the cost of transport and/or overnight accommodation if these are provided to enable employees to attend. Divide the total cost of each function by the total number of people (including non-employees) who attend in order to arrive at the cost per head.

http://www.hmrc.gov.uk/manuals/eimanual/eim21690.htm

Things to watch out for:

1. The function must be open to all staff, if its just directors, its taxable

2. The cost must not exceed £150 per head, otherwise it will all be taxable http://www.companychristmas.co.uk/news/tax_free_christmas_parties

3. If you have several events during the year you may have to choose which ones qualify if the total exceeds £150

steve@bicknells.net