Covid-19 support: Self-employed income grants extended

An employer may provide subsidised or free meals for its staff tax-free. Employer subsidised meals must be:
–  Available to all staff.
–  Made available either at a canteen or on the employer’s premises.

‘Meals’, include light refreshments.
‘Available to all staff’ means available to all staff who work at any particular workplace.
– Meals may be provided by trolley service rather than from a kitchen in the workplace.
– Relief does not apply if any staff are excluded. For example, there would be no relief for meals provided in an exclusive director only dining room.

This tax relief is separate to and independent of the tax relief for Staff parties & Annual Functions or for Subsistence, claimed as part of business travel.
If the qualifying conditions for subsidised meals are not met, it may be possible to claim relief under the Staff Parties provisions, otherwise, the meals will be taxable benefits of employment and reported on form P11D.

Practicalities
– It is possible for a one-person company to claim the relief.
– If all employees have to work from home, it is possible that the relief can apply per employee per home workplace.
For example, in the case of a one-person company, where the director works at home:
– An agreement is made to provide staff lunch.
– The company may then reimburse the director’s costs of lunch.
– The director is expected to retain receipts and complete an expense claim form in respect of the expenses (on an actual basis).
–  Provided that these costs are reasonable and are paid in accordance with the legislation, the expense may potentially be agreed as a Flat-rate allowance with HMRC.
– It is advised to write into the employer’s PAYE office in order for HMRC to formally approve the flat rate to be reimbursed.
– If a flat-rate allowance is approved this reduces record keeping requirements.
– If HMRC does not approve the arrangement and the director in this example has failed to claim the actual amount spent, or does not have receipts to back it up, it is most probable that HMRC would raise a PAYE assessment on the employer.

Alternatively, a company and director may have an agreement that the director charges the company rent for use of home as a workplace.
– The provision of subsidised meals may be an additional service that is incorporated into that home working rental agreement at a fixed weekly cost.
– The director will be required to declare rental income and claim back expenses under Self Assessment.

Restrictions
Directors and employees who receive rent or an allowance for Working from home may not claim the £1,000 Trading & Property Allowance due to the restriction that the allowance cannot be claimed if any payment is received by an individual’s employer (or the employer of their spouse or partner).

Do you need more guidance on the subject matter of subsidised meals?

We offer a wide range of services unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the hospitality sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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European property owners face higher tax bills

Now that the UK has finally left the EU some taxpayers will start to see additional tax costs. One example is where UK residents own holiday homes in EU countries that they rent out for part of the year.

Owners of EU rental properties may now be required to pay more tax in those countries, having previously benefited from a lower rate of tax for EU nationals. Those renting out Spanish properties for example will see the rate of tax they pay in Spain increase from 19% to 24%. There would be double tax credit relief for the overseas tax suffered against the UK tax liability on the rental income, but those who pay UK tax at 20% will see their overall tax bill increase as a result. The UK leaving the EU may also have the effect of increasing the amount of capital taxes and social security taxes payable by property owners.

The property tax rules vary from country to country, so contact us if you are likely to be affected by these changes.

Do you have a European property and need tax help? We offer a wide range of services which are unique to your business and work with clients all over the world. Our team of chartered accountants have a wealth of experience in a broad range of sectors, including property and construction. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

Our fantastic team at A&C Chartered Accountants are here to help.