Well seasons greetings to you all! it's been a very strange last 10 days or so. From around the 1st of December, I started feeling a little under the weather and took a lateral flow test which was negative. By Monday of last week Caroline was also feeling unwell so we both took a lateral flow test and this time there was no doubt, we were both positive. This meant we had to close the TSA offices, cancel our appointments and self-isolate at home immediately. A PCR test was carried out the same day and we got the results on Tuesday confirmed that we both had covid 19. By this stage we were both well and truly feeling the affects of Covid too. Nevertheless, duty called so we put an out of office on to say we would be completing payroll and VAT as normal and on time, but explaining our situation. We only lost one client, and I hate to say it, but we aren't that disappointed. He thought the 10 day legally enforced closure of our business didn't apply to him because his VAT was due on the 7th. The fact we had covid and more importantly symptoms (so people have covid and don't even notice) didn't seem to register. Thankfully our other clients have been really supportive and we are very grateful. A great many of our clients we are proud and lucky to count among our friends too. Obviously it goes without saying but covid 19 is a reasonable excuse for late filing of any tax return. By Friday of this week my symptoms worsened and I was admitted to hospital on Friday evening with breathing difficulties. Thanks to the efforts of the people who have looked after me, the ambulance staff and the hospital staff, I'm feeling much better and there is every chance I will be discharged tomorrow.
Covid can be a really nasty business, and it can affect your business too. For example, we do have contingency plans so that in the event of accident or illness, if our existing staff can't cope we have an agreement for another firm to manage TSA for us. However, in the these circumstances, who would want to put themselves at risk of infection by visiting our office? We can't cover that contingency so we'll have to wait the full ten days before we can get access to records that aren't stored electronically. We are very sorry for the inconvenience and hope that our clients will continue to be patient and understanding. We will be asking all of our staff to work longer hours and recruiting as necessary to catch up for these lost few days.
But here is one Christmas gift to you all before I close this blog post. Did you know that your Christmas bash (under certain circumstances) can be tax deductible and so can Christmas gifts? And you can even claim the VAT back! So what the rules? Read on.
Staff Christmas party - Generally speaking, entertaining your staff is tax deductible, but you have to be careful that they are the only people you're entertaining. If anyone drops out, you can't backfill them with your clients or customers because client entertaining is not tax deductible. You can invite them to bring family up to a maximum of £150 per head or less (inclusive of VAT.
Staff Christmas Gifts - Staff will always appreciate a gift from the employer right? Well, maybe not if there's a tax bill attached! Fortunately, a statutory exemption from income tax and national insurance for employees and employers exists thanks to the trivial benefit rules.
The current form of these rules took effect from 6 April 2016, and the key conditions are:
The cost of the gift, including VAT, does not exceed £50 per employee.
The gift is not cash or a cash voucher – a voucher which can be exchanged for cash. A non-cash, gift voucher which can be spent in a retail store should be acceptable.
The gift is not provided under a salary sacrifice or other arrangement.
The gift is not provided in recognition of particular past or future services performed by the employer - a gift on the occasion of Christmas should meet this requirement.
This is an all or nothing exemption - if the cost of a gift exceeds £50 then the full value is taxable under the usual benefit in kind rules.
Where the benefit is provided to a group of employees and it is impractical to work out the exact cost per individual, then the average cost must come under the £50 limit.
As well as gifts such as turkeys or hampers (provided they cost less than £50), the exemption can also be used to cover a staff meal or party costing under £50 a head if the normal staff party limit of £150 per annum either doesn’t apply or has already been used in the year on Christmas parties.
Further conditions for directors
There is an additional annual cap of £300 on the aggregate value of trivial benefits that can be paid to directors or office holders of close companies (companies owned and controlled by five or fewer participators, as is the case in many family companies) or employees related to them in any one tax year.