Let the Taxman help you celebrate Christmas

Let the Taxman help to contribute to your Christmas party

As the Festive Season and the flurry of activity that precedes it gets closer, you may be considering how much a seasonal gesture of thanks to your staff may cost you and the tax implications.

Let us explain the rules:

You are able to spend a maximum of £150 per member of staff plus an additional £150 for any partners or guests. To qualify, ALL of your team at your location must be invited. This cost is fully tax deductable with no benefit in kind income tax or National Insurance and there is a saving of 20% on corporation tax. Your Profit and Loss Account MUST show that the costs are for 'staff entertainment'.

Your staff will love your caring, sharing approach in showing your appreciation at this busy time of year with the added bonus to you of a positive boost for workplace morale!

To stretch that warm team feeling even further into the New Year, you are also eligible for the same benefits at any other time of year i.e. a Summer BBQ/picnic. Just ensure that you spend less than £150 over the whole year.

The £150 includes VAT and covers the cost of any transport and/or overnight accommodation. The cost per staff member can be calculated by dividing the total cost of your function by the total number of all of those attending (including Partners/guests). The VAT is fully recoverable when paying for your staff. A small charge to your guests and paying over a small amount of VAT means the VAT on the higher total costs is fully recoverable.

Being a lone director/employee does not mean that you are excluded from partaking in some Christmas cheer! As an only staff member you are entitled to the £150 per head exemption and the same again for your Partner even if they are not involved in your business. The costs is fully tax deductable saving you 20% in corporation tax. Again, you will need to make sure your Profit and Loss Account shows it as 'staff entertainment' but we would advise against reclaiming the VAT in this instance.

So be happy, be merry and ensure you and your staff get the most from your celebrations knowing that The Taxman is playing 'Secret Santa' this year!

 

 

 

 

 

 

                         

Christmas comes round only

Christmas comes round only once a year - it is nice to have any help from HMRC that we can

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