Some businesses are asking HM Revenue & Customs (HMRC) about the tax and National Insurance contributions (NIC) implications in specific situations related to the 2012 Games. It’s important to understand how your business should treat any activity connected to the Games for tax purposes.
This guide provides answers to commonly asked questions.
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There are no special tax rules covering this issue for the Games. If you want to buy tickets for the Games, and/or give them to your staff, for example as a prize to the best salesperson, the usual HMRC expenses and benefits rules apply. The same is true if you plan to cover the travel costs, accommodation and spending money for meals.
You are providing the tickets and a subsistence package as a reward for services as an employee; as such the cost to you should be treated as a ‘benefit’ in kind to the employee. You can either report this on their P11D, or if you wish to bear the tax on their behalf, you could enter into a PAYE Settlement Agreement (PSA) with your tax office.
Find out more about PSAs and how they can reduce expenses and benefits paperwork
If your business is commissioning an exhibition stand at the Olympic Park for the period of the Games, it’s likely that it would be classed as a temporary structure. As such, you don’t need to operate the Construction Industry Scheme (CIS) on the payments you make to the erecting business. There are no special tax rules for the Games. Although the CIS legislation indicates that it applies to temporary buildings and structures, in practice, certain temporary structures are considered to be outside its scope as long as they are only in place for a limited time. These include:
It is unlikely that exhibition stands and marquees will remain in place for long. Similarly, film, TV and theatre sets are commonly dismantled quite soon after their construction. If the structure in question will not remain in place for more than two months you may accept that its erection is outside the scope of CIS.
Find out more about temporary structures in the CIS manual
If you have bought tickets for the 2012 Olympic and Paralympic Games, and you plan to use them entertain clients, then your employees may need to be present at the event to ‘generate future business’
There are no special tax rules - for UK-based employees - for client entertainment for the Games. The usual rules apply. Follow the links at the end of this section to find out more about the tax position for client entertainment.
If your employees are working on the construction of the Olympic site, and are being provided with local living accommodation until the Games are over, they may use the accommodation to entertain clients during the period of the Games. There are no special tax rules - for UK based employees - for the Games. The usual tax rules apply, but the temporary workplace rules need to be fully considered. Accommodation provided at a temporary workplace to qualifying employees is not treated as a benefit in kind for that employee.
Read more about client entertainment and expenses and benefits
London 2012 Partner businesses may be committed to supplying a number of employees to act as ‘volunteers’. If the terms and conditions of these employees are being temporarily amended to include this additional duty, and they will be receiving their normal pay, you may choose to reimburse their travel, accommodation and meal expenses. There are no special tax or NIC implications for the Games and the usual employee travel rules for UK-based employees apply.
Where an employee is travelling to fulfill the duties of the employment they are entitled to claim tax relief on those expenses. Most employers’ have a dispensation from HMRC to make these payments, to eligible employees, without deduction of tax and the requirement to report them on the individual’s form P11D. The usual rules will apply to the operation of travel and subsistence payments to decide if the employee is eligible.
If your employees have registered as Games Makers for the Games and they are taking paid leave for the period, you may like to support them and the Olympic Movement by paying for their travel and accommodation. There are no special tax rules for UK based employees for the Games. You are providing the travel and accommodation to your employees by virtue of their employment, but not whilst travelling whilst undertaking the duties of their employment. As such, the cost to you should be treated as a benefit to the employee. You can either report this on their P11D, or if you wish to bear the tax on their behalf, you could enter into a PAYE Settlement Agreement (PSA) with your tax office.
Find out more about PSAs and how they can reduce expenses and benefits paperwork
If, in the spirit of the Games, you decide to give your employees the opportunity to take part in a sports coaching training scheme that will enable them to coach at local sports clubs, you need to apply the usual tax rules on training courses as there are no special tax rules for the Games. The cost of enrolling the employees on the course can be treated as work-related training, under Section 250-251 Income Tax (Earnings and Pensions) Act 2003 (ITEPA) as long as the employee goes on to provide voluntary services to a sports club that was in need of coaches. As work-related training has no benefit charge on the employee there would be no tax or NIC effect for the employee.
Find out more about tax and NICs obligations if you cover the costs of training for an employee
If your business is involved in delivering the Games, perhaps as an Official Commercial Partner, you may need your non-UK resident staff to start work now. There are tax exemptions available for those who are visiting the UK to compete in the Games and a limited number of people who are visiting the UK to work on Games-related activity.
Find out more about tax exemptions for the 2012 Games
If you have checked the HMRC website, and you have any query that your employer has not been able to answer you can contact the HMRC Olympic Helpline. This helpline is available from 4 April 2011.
Telephone: 0845 366 1123. Lines are open from 8.00 am to 6.00 pm, Monday to Friday.
If you’re calling from abroad, please telephone +44 151 268 0561.
