Gift from employer

Spride

Just a thought, with regard to the current gifting scandal around the PM, if I were to forgo half my wages and instead receive a new car as a gift from my employer I presume this would be tax free?

Mark_d

No.  If your employer gives you an asset of significant value, what makes you think it could be tax free?

Spride

I understand that Kier Starmers gifts are not taxable, what's the difference? So what you are saying is a gift from an employer is, a gift from a client wouldn't be? I'm trying to understand how someone can get over £100k in free stuff but have no tax liability?

Penguin_

Spride said:

Just a thought, with regard to the current gifting scandal around the PM, if I were to forgo half my wages and instead receive a new car as a gift from my employer I presume this would be tax free?

I mean its called salary sacrifice but you couldn't have your gross earnings after the sacrifice taking you below NMW.

Spride

Let's say it wasn't a car then, what if it was something intangible, a holiday for example?

Penguin_

Im struggling to see the correlation as the gift to Kier Starmer was given from a client....

Mark_d

Spride said:

I understand that Kier Starmers gifts are not taxable, what's the difference? So what you are saying is a gift from an employer is, a gift from a client wouldn't be? I'm trying to understand how someone can get over £100k in free stuff but have no tax liability?

You can gift money to charities and some specific organisations tax-free.  Some other gifts are tax free - but if you have an agreement to work for your employer in return for "a gift", then that is not a gift in the legal sense.  Rather it is part of your income, or a taxable benefit.

Spride

Penguin_ said:

Im struggling to see the correlation as the gift to Kier Starmer was given from a client....

I'm trying to get my head around how the rules work, so let's ignore the employer aspect, a client gives me an all expenses paid holiday, value, let's say £5000, is this taxable?
It's not a situation i'm likely to be in unfortunately, I just want to know the regulations on gifts received through employment!

DullGreyGuy

Spride said:

Just a thought, with regard to the current gifting scandal around the PM, if I were to forgo half my wages and instead receive a new car as a gift from my employer I presume this would be tax free?

No, gifts your employer gives you are a Benefit in Kind, with a very few exceptions, and so you have to pay tax on them. 

A former employer used to give all staff £750 of wine, you had some choices of red/white/mixed and how many bottles but the total value was always the same. They put it on the P11D and you have to pay tax on it. 

Spride said:

I understand that Kier Starmers gifts are not taxable, what's the difference? So what you are saying is a gift from an employer is, a gift from a client wouldn't be? I'm trying to understand how someone can get over £100k in free stuff but have no tax liability?

The person giving them the gifts wasnt their literal employer, not going to get into the argument that MPs work for the citizens. 

When someone gives you a birthday present how much tax do you pay on it?

So want £100k of free stuff, get friends who are rich enough to splash that kind of money on you. Corporate and Personal gifts aren't tax deductible so they're paid out of net money. Best mate from uni landed a g/friend from a monied family. She proposed to him earlier this year with a £150k watch, rather than a ring. Obv he doesn't pay tax on a gift.

Spride

DullGreyGuy said:

Spride said:

Just a thought, with regard to the current gifting scandal around the PM, if I were to forgo half my wages and instead receive a new car as a gift from my employer I presume this would be tax free?

No, gifts your employer gives you are a Benefit in Kind, with a very few exceptions, and so you have to pay tax on them. 

A former employer used to give all staff £750 of wine, you had some choices of red/white/mixed and how many bottles but the total value was always the same. They put it on the P11D and you have to pay tax on it. 

Spride said:

I understand that Kier Starmers gifts are not taxable, what's the difference? So what you are saying is a gift from an employer is, a gift from a client wouldn't be? I'm trying to understand how someone can get over £100k in free stuff but have no tax liability?

The person giving them the gifts wasnt their literal employer, not going to get into the argument that MPs work for the citizens. 

When someone gives you a birthday present how much tax do you pay on it?

So want £100k of free stuff, get friends who are rich enough to splash that kind of money on you. Corporate and Personal gifts aren't tax deductible so they're paid out of net money. Best mate from uni landed a g/friend from a monied family. She proposed to him earlier this year with a £150k watch, rather than a ring. Obv he doesn't pay tax on a gift.

Thanks, that's seems to make sense, so in essence, its the same as if a friend bought me a high value item, but no need to declare anything.

Grumpy_chap

Spride said:

I'm trying to get my head around how the rules work, so let's ignore the employer aspect, a client gives me an all expenses paid holiday, value, let's say £5000, is this taxable?

There would be no tax for the recipient of the gift to pay.  The donor will either be an individual, so the gift is given from post-tax income or the donor is a business in which case the value of the gift cannot be deducted as an allowable expense against taxation.  The revenue collector gets their tax one way or another.

Gifts from Clients (outside of tipping as per hospitality) are quite rare.  Gifts from Suppliers are more common, though far less so than in previous times.
In both cases, the employer is likely to have some rules around accepting and declaring gifts as there will be concerns around bribery and influence.

If you do have a Client offering you a £5k holiday, you may face a similar complication as this gentleman:
https://www.bbc.co.uk/news/articles/clywd1l0j58o#: