Tax Treatment of Business Dinner - Calculations

T

TTI

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Hi,

I have been looking through the previous threads on Business Dinners and also the linked Revenue documents but it is still not clear for me.

Ltd Company, I am PAYE Director.

Example: 60 euro dinner with client

Cost to company:
Option 1: Pay for the dinner from my wages.
4% PRSI, 7% USC, 41% PAYE = 115 euro gross cost to company

Option 2: Can company pay direct? For one or both of us? I believe CT has to be paid on it, what about close company surcharge? What is the gross cost to the company?
 
Client entertainment is a non allowable business expense.

So the company could pay the bill but not claim it as a deduction in computing it's profits.

Hope that helps.
 
So the gross cost would be 85 euro, i.e.

85 euro before 12.5% corporation tax
75 euro before 20% close company surcharge

And it's acceptable for that expense to cover my meal as well?
 
A question I would ask is how often are these dinners ? Frequency would determine if there were a BIK element. (And of the company picks up the tax on the BIK, then that is a further BIK)

As a PAYE Director, are you sure your company is liable to the close company surcharge? (Note to self; must revisit these rules some day soon)
 
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