€1000 Small Benefit Exemption for Directors

user060916

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

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

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

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

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

SureYWouldntYa

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