April Fool! Which tax fact is a fib?
You probably saw some of the great April Fools pranks in the media yesterday, including the impressive story from Google about their forthcoming 8-bit video game console version of Google Maps.
But when it comes to being ridiculous, there are times when HMRC beats even the best April 1st efforts. We’ve already seen the fallout from the latest VAT changes in the Budget about when tax is applicable to hot or cold food - and the debate about whether this is unfair to pasty-makers - but there are plenty of other occasions when UK tax rules are downright silly.
So here’s the challenge for you. We’ve come up with five tax statements in the list below, but only one of them is incorrect. Believe it or not, the other four are completely accurate.
All you have to do is tell us which is the odd one out. So if you think you know which one's a load of rubbish, post a comment below and tell us which it is - and, if you’re feeling really clever, you can also tell us what's wrong with it.
Our only rule is that accountants aren’t allowed to enter! If you’re an accountant you know where to find the answer if you don’t know it already - so we’ll be keeping an eye out and moderating the comments for any suspiciously accounting-esque responses! :)
OK, so here’s your list.
Remember, only one of these is not 100% true!
1) Mobility aids for the elderly are subject to the reduced rate of 5% VAT, whereas equipment for blind and disabled people is zero-rated. (Don’t ask me what happens if someone is both elderly and blind.)
2) Chocolate spread is zero-rated for VAT but chocolate bars are standard-rated.
3) Milk shakes are zero-rated for VAT but the flavouring for them is standard-rated - unless that flavouring is an extract of coffee or cocoa, in which case it would be zero-rated.
4) When an employee arranges private travel for him/herself and you pay the travel supplier direct, that cost is not subject to PAYE, only to NIC. But if the employee pays for the travel and you reimburse your employee, the cost is subject to both PAYE and NIC.
5) If an employer reimburses an employee for the cost of clothing (that’s not a uniform or protective clothing) to wear at work, then that cost is subject to PAYE - but it will only be subject to NIC if the clothing is not durable. That means paying an employee for the cost of a pair of tights would be subject to NIC, but reimbursing them for a pair of shoes wouldn’t be.
Which of those five is not completely true?
You tell us!
- National Coworking Day 2018
- How FreeAgent can help you comply with GDPR
- Help us give small businesses a big voice
- Self Assessment filing for 2017/18 is live
- Introducing Insights!