€1000 Small Benefit Exemption for Directors

user060916 · 25-07-2023 07:00PM #1

I'm a director of a small two director company. There are no employees.

Currently the company owes me €4k director loan and has about €4k in the bank so it's basically broke even.

Can the company buy €1,000 gift cards for both directors even though there's the "loan"?

SureYWouldntYa · 28-07-2023 04:47PM

The loan can be paid back to you tax free at any time

Revenue would likely disallow the tax free element of it if you are not a paid employee where payroll is normally operated, it could be deemed €1,000 net pay and grossed up with tax due accordingly

If your aim is get €2k out of the company and €1k into each directors hands, the best way would be for you withdraw €2k and then you gift €1k to the other director (you can give this to him tax free as it is under the annual exemption of €3k which any person can give to another person)

user060916 · 29-07-2023 10:29AM

My aim it to pay as little tax as legally possible.

I'll be adding myself to payroll eventually but haven't for simplicity sake. Ideally I'd like to just take a random amount out of the company each month (very small around 500-1k) depending on how trading goes.

SureYWouldntYa · 29-07-2023 03:18PM

Once you're on the payroll for a few €k in the year then paying the voucher would be fine

Other director would also need to be on the payroll if you want to do that for them

user060916 · 29-07-2023 03:31PM

Okay so I couldn't just add us to payroll then take the vouchers?

SureYWouldntYa · 29-07-2023 04:14PM

Yes but if you were to ever be checked by Revenue, for it not to be deemed salary sacrifice or similar you should be paid at least a few thousand each first

€1000 Small Benefit Exemption for Directors

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