Payment from a Partnership

whoknowsthis

I'm in a partnership. Me and the other partner pay tax at 41%. Anyway we want to make an annual payment of approx €2,000 as a thank you gesture to a person who assists us by delivering product for us on their way home. They live next to one of our clients. This person is an employee of another company and does not want to provide us with an invoice as they don't want their employer to know of our arrangement. We want to do this above board. I was wondering if we could treat this as a non-tax deductible expense of the partnership so that the recipient would not have to report it as income? In this way the partners would pay the tax at 41% so the Revenue would not be out of pocket. It seems logical but would it be acceptable to the Revenue?

barneystinson

Simple - you, the partners, take the cash out of the business, the same as any other drawings, and you give it to this person as a gift. They are entitled to receive a gift of up to €3,000 in a year without any tax implication....

dbran

Yes but technically its not a gift. The guy drops stuff off for their customer so he is providing a service for it. Its income tax.

Now how it would be found out is another matter;)

barneystinson

Ah no I wouldn't say the person is providing a service for it. If there's no contractual obligation to pay then you couldn't argue that there's been a service provided.

From a Revenue perspective the money has been taxed in the hands of the partners, so what they choose to do with it then is not of concern...