Q. I am the director of my company and one of my employees is getting married next month. I want to pay for the cost of the honeymoon night and taxi that they will use to travel to the airport. The company has an account with a local taxi business. Are there any tax implications for the employee and can the company claim tax relief?
A: Generally, any gifts made by a business to an employee are taxable as benefits in kind unless covered by a specific exemption (or are a ‘trivial benefit’). This is the case even though the reason for the gift is not business related (as in this instance). The reason being that where there is an employer-employee connection, the gift is employment-related even if the reason for the gift is a private one.
Where a benefit in kind is charged then the company will be able to claim tax relief on the cost to the business.