Commentary

V7.438 Input tax—employee benefits

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.438 Input tax—employee benefits

Part V7 Tax planning | Commentary

V7.438 Input tax—employee benefits

A happy employee is a productive employee – so input tax can be reclaimed on many benefits and perks provided to employees. However, in some cases, output tax must be accounted for on the onward supply of the goods to the employee. The following is a brief summary of the benefits where input tax can be reclaimed.

  1.  

    •     Computers supplied for home working – see V7.443.

  2.  

    •     Sporting facilities available to all staff – corporate membership of a local gym may be taken out by a company, and this will be deductible for input tax purposes as long as the facility is available to all staff. If a facility is available to only specific employees, then input tax can still be reclaimed but output tax must be declared for the same amount, ie nil tax gain. See Example 3.

  3.  

    •     Canteen and recreational facilities – input tax can be reclaimed on all costs relevant to a free staff canteen and/or recreational facilities with no corresponding output tax charge providing the facilities are available to all employees without charge.

  4.  

    •     Relocation expenses – employers may provide

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