tax free gifts to employee of €250 per annum

[johnnyg]

Hi,

Can both directors get a xmas bonus of 250 euro's, or is it only applicable to the director earning?

Cheers,

 

[DirtyH2O]

Re: director xmas bonus

Does anyone know if this is restricted to employees or can directors avail of it as well?
Also has is this reconciled with long service awards such as 5/10 year presents which can be several thousand in value and are not taxed.

 

[envelope]

Re: director xmas bonus

I asked my accountant if I can take this as a bonus and she said that revenue have stopped this and if i take it ill have to pay tax on it. Who do you believe?

 

[mayka]

Re: director xmas bonus

Here is the link on the Benefits-In-Kind guide on the Revenue web site:
[broken link removed]
See section 2.3 "Small benefits". The document is new and they could hardly include this section into it if they'd stop this. And the strange thing about the section is that the guide does not say implicitly this should be a non-cash benefit (i.e. vouchers)...

And "yes". Directors can receive small non-taxable benefits. Look here:
[broken link removed] - Section 1.4 "Use of terms 'employees' and 'PRSI'..."
- All references in this Guide to “employees”
include references to directors unless otherwise
stated.

 

[envelope]

Re: director xmas bonus

cheers mayka, ill send this link to my accountant. she doesnt seem to want to do anything out of the ordinary. maybe a need a new accountant.

 

[ubiquitous]

Re: director xmas bonus

Your accountant's judgement is probably correct.

While the payment of a €250 Xmas bonus to a director may well be technically defensible by reference to legislation, being seen to bend the rules in this way may raise the suspicion of the Revenue if the issue came to light during a Revenue Inspection or Audit of your business or in some other way.

No matter how tax-compliant you are, the last thing you need is to get on the wrong side of a Revenue Inspector during an audit. In that context, I don't think the tax saving of around €120 is worth the potential hassle. You would probably be much better off ensuring that you are maximising all your legitimate motor & subsistence expense entitlements for example.

 

[envelope]

Re: director xmas bonus

Thats true no need to bring and audit upon myself, im claiming for mileage and subsistence already and as you say for 250 its not really worth it.

 

[MsGinger]

Re: director xmas bonus

Does anyone know if this is restricted to employees or can directors avail of it as well?
Also has is this reconciled with long service awards such as 5/10 year presents which can be several thousand in value and are not taxed.

Long service awards can only be given for service of 20 years or more & as long as a similar award has not been given in the previous 3 years. Also long service awards cannot be made in cash - they must be a tangible item e.g. watch.

 

[Shmee]

Re: director xmas bonus

what does claiming 'subsistence' mean?

 

[envelope]

Re: director xmas bonus

Its a daily allowance that is supposed to pay for meals etc. The revenue have a rate that changes each year for inflation and thats the one i use.
Its a valid expense.

 

[DirtyH2O]

Re: director xmas bonus

Long service awards can only be given for service of 20 years or more & as long as a similar award has not been given in the previous 3 years. Also long service awards cannot be made in cash - they must be a tangible item e.g. watch.

I got a 5000 travel voucher for 5 years and 10 years get double to triple that - would I be liable or would my ex employer?

 

[Shmee]

Re: director xmas bonus

Its a daily allowance that is supposed to pay for meals etc. The revenue have a rate that changes each year for inflation and thats the one i use.
Its a valid expense.

Thanks Envelope, what do you have to do to be eligible for the allowance, i.e. I presume you can't get it if you work from home etc?

 

[Firefly]

Re: director xmas bonus

Your accountant's judgement is probably correct.

While the payment of a €250 Xmas bonus to a director may well be technically defensible by reference to legislation, being seen to bend the rules in this way may raise the suspicion of the Revenue if the issue came to light during a Revenue Inspection or Audit of your business or in some other way.

No matter how tax-compliant you are, the last thing you need is to get on the wrong side of a Revenue Inspector during an audit. In that context, I don't think the tax saving of around €120 is worth the potential hassle. You would probably be much better off ensuring that you are maximising all your legitimate motor & subsistence expense entitlements for example.

ubiquitous...whilst I agree that you don't want to get on the wrong side of the Revenue, an annual payment of 250 or less as a performance bonus is perfectly legal & tax compliant so it's hardly bending the rules?

Firefly.

 

[pbyrne]

Coming back to this one as it looks from the thread that there was no agreement on what was correct or allowable.

In the scenario for two directors where both are working for the company fulltime - would it be considered acceptable and legal from revenue's perspective for them to receive the 250 bonus after a very hard year's work!

 

[ClubMan]

Re: director xmas bonus

I got a 5000 travel voucher for 5 years and 10 years get double to triple that - would I be liable or would my ex employer?

I believe that you would be liable for BIK income tax and PRSI (?) on the benefit above the small gift exemption limit and (in recent years) your employer would normally be obliged to collect this at source. If in doubt get professional advice.