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How to buy £300 of wine through your limited company TAX FREE

Buy £300 of wine tax free

This corker (excuse the pun) of a tax loophole has just come to our attention. Yes – HMRC have introduced a tax loophole allowing you to buy wine through your limited company – what a result for us wine lovers!
The new “trivial benefits exemption” introduced earlier this year means that, as a director of a limited company, you can purchase multi bottles of wine (costing less than £50 each) up to a maximum of £300 of wine in any one year. I would imagine the intention is we give it to your clients perhaps but who says you can’t park a bottle or two or more for yourself?
Of course if you do not like wine the benefits can be anything else as long as the rules, below, are followed.

The rules

To qualify for this benefit you do need to keep within the rules, which frankly shouldn’t be arduous:
• The total benefits are capped at £300 per year
• It must not be cash or a cash voucher
• The benefit must not exceed £50
• The benefit must not be a contractual obligation or in recognition of a service performed – so do not buy yourself wine for doing a good job but buy it because there the sun is shining (or some other ridiculous reason not connected to performance)

Note – further rules may apply; so it is always best to check the detail with your accountant.

Presents and Gifts
Within the £300 maximum and £50 per item limit, as a director you can also give “benefits” to members of your household; so you could buy your (living at home) children a gift such as DVD’s, computer games perhaps (less than £50) or your spouse a beautiful bouquet of flowers, which main gain you some brownie points!

Spouse
Although if your spouse is a director they too may benefit from this – so an extra £300 allowance with a maximum of £50 per “benefit”.

Multi Directorships
And of course if you are a director of more than one limited company you can exploit this rule through each of your directorships.

More information
Draft guidance from HMRC on this is set out at:

https://www.gov.uk/government/publications/tax-exemption-for-trivial-benefits-in-kind-draft-guidance/tax-exemption-for-trivial-benefits-in-kind-draft-guidance

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