The Night (mare) before Christmas
Companies may need to agree a Taxed Award Scheme with influencers
Santa’s in a pickle – Christmas is coming, and the Elves are threatening to down tools and refuse to sort and pack gifts for Christmas. And the cause of this unrest? HMRC.
Santa has never paid the Elves in cash terms. He gives them items throughout the year, which they promote in their roles as influencers, hoping that it will inform Santa what he needs to have in stock(ings) via the Christmas lists he receives.
Unfortunately, the Elves don’t see themselves as mere influencers – rather, they see themsELVES as a vital part of the whole Christmas experience and have always assumed that Santa would deal with the tax due on their gifts via a Taxed Award Scheme (TAS), whereby the company – Santa, Inc. in this case – settles the tax and NICs which are due directly with HMRC… Now HMRC have written to several of the Elves, stating that they owe tax on the “payments in kind” from Santa for the last 4 tax years, as Santa (Inc.) sadly didn’t get around to arranging a Taxed Award Scheme with HMRC!
Now Santa has no choice! He will need to agree a TAS with HMRC as a priority and promise to pay the tax and NICs due for the last 4 years as a priority. Otherwise, the Elves will refuse to spread the message of Christmas and Santa, Inc. might suffer the Ignominy of an HMRC tax audit and all the publicity – all bad – which that could bring!
As you might imagine, this has all caused Santa some sleepless nights…
Fiona Fernie, Partner and tax dispute specialist, said:
“However, perhaps the biggest message for companies to take away from this is that they too may need to agree a Taxed Award Scheme for any social influencers which they ‘work with’, otherwise, they could soon be in the same boat as poor, old Santa…”
Would you like to know more?
If you would like to discuss the above matter, please get in touch with your usual Blick Rothenberg contact or Fiona using the form below.