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Sam
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Category: Tax
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I have sold part of my business and paid all taxes. I made

Resolved Question:

I have sold part of my business and paid all taxes. I made some cash gifts to my ex-employees. These were paid by me personally from the bank account in which the consideration was received.
I understand that the payments may be liable to income tax and NI?
Submitted: 9 months ago.
Category: Tax
Expert:  Sam replied 9 months ago.

Hi

Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

Yes your understanding is correct as these payments were made due to connection of their employment (or cessation)

The fact these came from your personal account and that you wish to treat them as gifts I am afraid, cannot be so.

Ideally you would have taxed these gifts (and subjected them to national Insurance) prior to payment but as this was not the case I would advise

1) you write to each of the employees detailing what should have taken place for them to declare this payment to HMRC and

2) You alert HMRC of the same so you can pay and Class 1 National Insurance (employers) and consider whether you also pay the tax that should have been deducted along with the employee National Insurance.

Please advsie if I can assist further

Thanks

sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13778
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Customer: replied 9 months ago.
One thing I omitted is that the gifts from sale of the business of a general partnership was made to ex-employees of the general partnership. The partnership has no legal identity and of course the partners are treated as self-employed for tax purposes. Does this make a difference given https://www.gov.uk/expenses-and-benefits-gifts-to-employees? .
Customer: replied 9 months ago.
Hi SamJust checking whether you will respond to the additional note or do I need to re-sign? My telephone number if this helps is 01624 662020.Many thanks, Clive
Expert:  Sam replied 9 months ago.

Hi Clive

I can send an additional service for me to telephone me if you would prefer (I am in the UK) - this will incur an additional fee or I can respond here - but the answer I gave remains the same (only the failure to pay then sits with just you)

Thanks

Sam

Customer: replied 9 months ago.
Okay, understood. Thanks Sam.
Expert:  Sam replied 9 months ago.

You are welcome and thanks for rating the service, much appreciated

Sam

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