Santa and other employers could face costly penalties from HMRC if they haven’t correctly reported their benefit-in-kind (BIK) charges, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a Director at the firm, said, “If Santa, Inc. or other employers haven’t correctly reported the BIK charge for their company-provided sleighs or vans, it could be a very expensive Christmas.
“HMRC can charge penalties of up to 100% of any unpaid BIK tax, and the standard annual taxable benefit charge on the provision of light commercial vehicles is £4,020.”
He added, “If a light commercial vehicle is only used for business purposes, it shouldn’t create any taxable benefit for the worker or any specific payroll reporting obligations for their employer.
“However, if Santa is using the sleigh throughout the year, including the eleven months of the year in which he isn’t working for personal journeys, which can include commuting to Santa, Inc’s. Lapland HQ from his home, HMRC will regard it as a taxable benefit. Businesses with non-magical vehicles will face the same scrutiny from the Revenue if employees make personal journeys in their company-provided vans.
“If BIK hasn’t been correctly reported in previous years by Santa, Inc. or any other business, the company could also be liable to tax and National Insurance Contribution (NIC) penalties for the failure to capture the relevant benefit on Form P11D.”
