I won a holiday at work months ago and now being taxed!?!

lil_Amz99

I won a holiday to Miami for 4 days through a supplier to the company I work for back in November, I have just been told by our accounts department I am going to be taxed on this (value £2200)

I was never told this at the time, is this correct?

Keep_pedalling

Presumably you won this through some sort of sales incentive, in which case it's probably treated as a bonus payment and therefore taxable.

lil_Amz99

I do not work in sales I am in the purchasing department. I have no targets and no bonuses

engineer_amy

Presumably the holiday was paid by the supplier and not your employer?


It is classed as a benefit, and nearly all benefits are taxable now (via your tax code)


Its tricky, as your employer shouldn't be taxing you for something that they didn't directly provide, however it could be argued that you wouldn't have been eligible for this benefit from the third party had you not been employed by your employer.


There is a question on the year end process that all employers must answer "3 - As far as you know did anyone else pay expenses ....to any of your employees while they were employed by you during the year? " I suppose your situation could fall into this question, and it was reported at the end of the tax year.


Having never answered yes to that question, I don't know what the next stage would be, whether HMRC contacted your employer to find out who paid expenses/benefits and what the value was.


Have you received a Tax code notice for this tax year? is it different to the standard 1060L, or do you receive any other benefits that affect your tax code?


I would start by asking your payroll/HR department for something in writing, explaining why they think it is taxable.


Here is a link to HMRC re the holidays, what is taxable and exempt https://www.gov.uk/expenses-and-benefits-holidays/what-to-report-and-pay

xylophone

If I were the OP, I would write to HMRC with full details and ask if tax is payable and if so on what basis.

zygurat789

It is a benefit of the job the OP is paid for, if he didn't have that job he wouldn't have had the holiday.
Yes it is taxable and yes his employer should report it to HMRC.
In strict theory all "junkets" provided to an employee of a customer by the supplier are taxable.

xylophone

Is this just a lottery prize? The supplier offers a raffle to all employees of companies he does business with?

If so, is this really a benefit provided by the employer?

I'd check with HMRC.

zygurat789

The benefit doesn't have to be provided by the employer it has to be because of the employment the person is in.

somethingcorporate

I think it will be taxable. We had this issue in our company a few years ago, hence we stopped providing trips as "prizes" and started giving out cheaper goods and cash and covered the taxable element ourselves.

It's not very motivating to get whacked with a huge tax bill for something like this.

Bean_Counter

I also agree it is taxable. Something similar came up on a CA course I was on a couple of years ago.

molerat

If paid for by a third party the employer should not be declaring it but the employee should according to this
https://www.gov.uk/employee-incentive-awards