Do you claim "trivial benefits"?

[malvolio]

Get yourself a nice DSLR camera. I did, as my business needs a webcam and sometimes photos to put on websites!

That's not quite the same thing, since you could justify that sas a business expense and save the CT and VAT on top.

Also your claim for staff entertainment and the like has to be spent on staff entertainment and the like. With receipts...

[willendure]

£750 of tax free nice things is not to be sniffed at.

Get yourself a nice DSLR camera. I did, as my business needs a webcam and sometimes photos to put on websites!

[malvolio]

As I understand it, the Pareto principle (aka "the 80:20 rule") basically means that you focus on the stuff with the biggest impact.

Looking at the OP's situation, I recommended that they shut the company down, i.e. focus on the £91k that's left in it rather than the few hundred that they could get from trivial benefits etc. Surely that fits in with the Pareto principle?

In my case, I'm doing this in addition to other activities, not instead of. If I turned down paying work so that I could process my expenses etc., that would be silly, but I'm not doing that. So, that's just a few minutes in the evening which I would otherwise spend watching a YouTube video or similar.

Speaking of YouTube, I saw a video by Neil deGrasse Tyson. The relevant section starts here:
https://youtu.be/B2inExgT77s?si=P9ZwnAwivYYRV2Bf&t=115
He asks: "If I see a coin in the street, what is the smallest denomination coin that I'll bend down and pick up?"
There's no right or wrong answer to that question, because it will depend on your circumstances.

In this context, you mentioned a six figure income, which I've never had. If you earn enough that an extra £50 is just a rounding error, that's a very nice position to be in, and I understand why you wouldn't bother with trivial benefits. In my case, the reward is worth the minimal amount of time.

Not knowing your particular circumstances of course, but I said £100k because that was MyCo's average annual earning over the 26 years I was actively in contract (as opposed to now, when someone else is doing the work...). If I claimed ever potential penny I could had have added about £500 a year on top. That, to my mind, fails pareto boundaries. YMMV, obviously!

[hobnob]

You really don't understand Pareto do you...

As I understand it, the Pareto principle (aka "the 80:20 rule") basically means that you focus on the stuff with the biggest impact.

Looking at the OP's situation, I recommended that they shut the company down, i.e. focus on the £91k that's left in it rather than the few hundred that they could get from trivial benefits etc. Surely that fits in with the Pareto principle?

In my case, I'm doing this in addition to other activities, not instead of. If I turned down paying work so that I could process my expenses etc., that would be silly, but I'm not doing that. So, that's just a few minutes in the evening which I would otherwise spend watching a YouTube video or similar.

Speaking of YouTube, I saw a video by Neil deGrasse Tyson. The relevant section starts here:
https://youtu.be/B2inExgT77s?si=P9ZwnAwivYYRV2Bf&t=115
He asks: "If I see a coin in the street, what is the smallest denomination coin that I'll bend down and pick up?"
There's no right or wrong answer to that question, because it will depend on your circumstances.

In this context, you mentioned a six figure income, which I've never had. If you earn enough that an extra £50 is just a rounding error, that's a very nice position to be in, and I understand why you wouldn't bother with trivial benefits. In my case, the reward is worth the minimal amount of time.

[malvolio]

If people can't be bothered with trivial benefits etc. because it's not worth the hassle, that's fair enough. It's a bit like the vouchers you get via Perkbox or IPSE Rewards, where you can save 4% on your supermarket shops; is that worthwhile, or do you prefer to just pay with your debit/credit card?

Regarding trivial benefits, I'd say the extra effort is minimal. If I'm buying something, I can use my company card instead of my personal card. Then I just have to categorise the expense when it pops up in FreeAgent. Gift vouchers add an extra step, but I'd say it's less than 5 minutes in total, which saves me £10. That's equivalent to £120/hour, which is more than I get paid as a contractor!

There's a similar issue for the home office allowance. It's roughly the same amount (£6/week = £312/year), but I've got it as a recurring monthly expense in FreeAgent so the only extra admin is to pay myself for those expenses (which doesn't have a deadline), i.e. transfer money from the company account to my personal account and then categorise the line item in FreeAgent.

Coming back to the OP's question, I assume this fits in with another discussion:
Retained profit - how would you get your mitts on it? - Contractor UK Bulletin Board
I keep my limited company open (even though I'm currently on an inside contract) because I am planning to use it again. However, if you never expect to use your company again, I'd just shut it down now rather than keeping it open to pull out money in dribs and drabs.

You really don't understand Pareto do you...

[northernladuk]

When I started contracting (1994), I claimed everything I could. All allowances, all expenses.

At the end of my contracting career (2020), I just couldn't be bothered. Basically, What Malvolio Said.

Exactly the same for me this. Went at it hammer and tong to start, trawling what I could and couldn't do, trying to run as efficiently as possible and towards the end just let it slip knowing I was still doing 90% of it and the rest wasn't really worth my time.

[hobnob]

If people can't be bothered with trivial benefits etc. because it's not worth the hassle, that's fair enough. It's a bit like the vouchers you get via Perkbox or IPSE Rewards, where you can save 4% on your supermarket shops; is that worthwhile, or do you prefer to just pay with your debit/credit card?

Regarding trivial benefits, I'd say the extra effort is minimal. If I'm buying something, I can use my company card instead of my personal card. Then I just have to categorise the expense when it pops up in FreeAgent. Gift vouchers add an extra step, but I'd say it's less than 5 minutes in total, which saves me £10. That's equivalent to £120/hour, which is more than I get paid as a contractor!

There's a similar issue for the home office allowance. It's roughly the same amount (£6/week = £312/year), but I've got it as a recurring monthly expense in FreeAgent so the only extra admin is to pay myself for those expenses (which doesn't have a deadline), i.e. transfer money from the company account to my personal account and then categorise the line item in FreeAgent.

Coming back to the OP's question, I assume this fits in with another discussion:
Retained profit - how would you get your mitts on it? - Contractor UK Bulletin Board
I keep my limited company open (even though I'm currently on an inside contract) because I am planning to use it again. However, if you never expect to use your company again, I'd just shut it down now rather than keeping it open to pull out money in dribs and drabs.

[NotAllThere]

When I started contracting (1994), I claimed everything I could. All allowances, all expenses.

At the end of my contracting career (2020), I just couldn't be bothered. Basically, What Malvolio Said.

[sadkingbilly]

and they wonder why contractors got a rep for being greedy, tax dodging mercenaries.
£300. - geez.

[hobnob]

If I've read up on the is correctly, even as the director, sole shareholder and sole employee of your own close Ltd you can give yourself gifts up to £300 a year and another £300 worth to your household family.

Not quite. Aside from the employee point that malvolio mentioned, look at EIM21870:
EIM21870 - Particular benefits: exemption for trivial benefits – directors and other officers of close companies – members of their family or household (from 6 April 2016) - HMRC internal manual - GOV.UK

"Where a trivial benefit is provided to a member of the office holder’s family or household, then the cost of the trivial benefit counts towards the office holder’s annual exempt amount, unless the member of the family or household is taxed on the benefit in their own right as an employee or office holder of the same company."

I.e. your partner would only get their own allowance if you make them the company secretary (or similar).

Would you make these < £50 gifts to yourself and your partner during the rest of the year even if the Ltd isn't earning? What about "the" £150cparty (I realise it can be more than one event). If not - why not?

I've given myself trivial benefits while the company hasn't been earning, although I've never used the full quota. I try to restrict it to scenarios that I can justify, e.g. birthday, Christmas, or the King's coronation. (I'm not a huge fan of the monarchy, but it's plausible that a "normal" company would give a bonus to staff for that.) I haven't used the party allowance.

Bear in mind that it's not free money, so it's only worth doing if you'd already be spending that money. E.g. if you buy a lot of stuff from Amazon then a £50 gift voucher would be useful, but I'm not going to commit to some kind of posh dinner every year just to get a discount (and it feels a bit silly to claim a takeaway pizza as my Christmas party).

[malvolio]

They are so trivial I've never bothered. An extra couple of hundred out of a six figure income is too much effort.

And you are not an employee of your company, you are a salaried officer. Big difference.

[Olly]

Like the title suggests - do you claim trivial benefits?
If I've read up on the is correctly, even as the director, sole shareholder and sole employee of your own close Ltd you can give yourself gifts up to £300 a year and another £300 worth to your household family.
This is an addition to £150 Annual event allowance.

My Ltd is not even 8 months old, it had income from my working a contract for 6 months but I've taken a perm role and I or anyone else is unlikely to generate further income for the Ltd.

Would you make these < £50 gifts to yourself and your partner during the rest of the year even if the Ltd isn't earning? What about "the" £150cparty (I realise it can be more than one event). If not - why not?

£750 of tax free nice things is not to be sniffed at.