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We act for a company which supplies office stationery products. The sales are made over the telephone. As an incentive to the employee of a customer to place an order, an item is offered to the employee to the value of approximately 5 per cent of the sales value of the order. The items offered can be anything, including videos, decanters, TVs, etc. They are not stock items and are mostly bought in specifically for the particular order depending on the employee's choice.
We act for a company which supplies office stationery products. The sales are made over the telephone. As an incentive to the employee of a customer to place an order, an item is offered to the employee to the value of approximately 5 per cent of the sales value of the order. The items offered can be anything, including videos, decanters, TVs, etc. They are not stock items and are mostly bought in specifically for the particular order depending on the employee's choice.
The employer who is buying the office supplies may or may not know that his employees are receiving these incentives.
The questions are:
(1) Are these incentives allowable for corporation tax as incentives or disallowable as gifts?
(2) Can the input VAT be reclaimed?
(3) Is there a National Insurance liability arising on benefits to employees?
(4) Would a taxed award scheme need to be operated by the client?
There are many businesses which give free gifts to customers depending on the size of order, but our concern here is because the gift is made to the employee placing the order, not to the customer. Useful comments would be appreciated.
(Query T15,684) — Whisky Galore.
The employer who is buying the office supplies may or may not know that his employees are receiving these incentives.
The questions are:
(1) Are these incentives allowable for corporation tax as incentives or disallowable as gifts?
(2) Can the input VAT be reclaimed?
(3) Is there a National Insurance liability arising on benefits to employees?
(4) Would a taxed award scheme need to be operated by the client?
There are many businesses which give free gifts to customers depending on the size of order, but our concern here is because the gift is made to the employee placing the order, not to the customer. Useful comments would be appreciated.
(Query T15,684) — Whisky Galore.
