Seven entirely useless Christmas tax facts

Need to amuse your relatives this Christmas? Find Christmas cracker jokes too exciting? We have collected for your delectation, a set of seven utterly useless tax facts to pass the time from lunch until the Queen’s speech. From marshmallows to Norway, we have your opening conversation gambits covered. 

  1. The VAT- free snowball fight.   A tribunal case earlier this year confirmed that a Snowball is, in fact, a cake.  I am of course referring to the marshmallow based confection produced by Tunnocks and Lees of Scotland which is covered in desiccated coconut.   The tribunal found them sufficiently messy they needed to be eaten sitting at a table with a plate and therefore met the cake definition.  Like the Jaffa cake before them, they are now zero-rated for VAT.
  2. Tis the season to - file your tax return.  On 25 December 2013 1,566 people filed their tax return - just up from 1,548 the year before.  Christmas Eve was a much more popular time however, with over 17,000 filing as Father Christmas approached. 
  3. The compulsory staff gift advice - Christmas gifts to staff which are ‘trivial’ are not taxable.  This might include a bottle or wine or box of chocolate.   (NB It is compulsory to include this reminder in any tax article written in the period of December).  
  4. The Christmas day service  - a number of countries in Europe have a church tax including Austria, Iceland and Germany.  In Germany you only pay if you are a recognised member of a religious body and it is calculated as an extra addition to your income tax bill.  There was uproar in September this year when previously weak enforcement of the charge on capital gains was tightened up.  Many people dropped their affiliation to their Church in consequence.  
  5. The Boxing Day hunt - a huntsman who received gifts of cash from people he dealt with in the course of his duties was assessed to tax by the then Inland Revenue on the value of the gifts in 1958.   He appealed but the Court agreed with the Inland Revenue these had been received in the course of his employment and he had to pay tax on his Boxing Day gifts from 1948/49 to 1954/55.  
  6. The post Christmas blues - in the UK we time our self-assessment tax bills to land on the 31 January along with the Christmas credit card bill.  In Norway, they know that paying tax is difficult in the summer holidays and at Christmas so they adjust your tax payments so that you pay over 10 and a half months of the year instead.  November’s earnings (usually paid in December) fall in a ‘half tax’ month so there is more to spend at Christmas.  June is a ‘no tax month’ so that you can afford your summer holidays. 
  7.  The Christmas bonus - the extra £10 those in receipt of state pension (and various other benefits) receive in December is tax-free!  Hurrah!  Don’t spend it all on the grandchildren…

Helen Thornley, Tax Consultant

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