There seems to be a lot of talk of Christmas parties and celebrations already and it is still weeks until Christmas.
So make sure that yours is tax deductible by following a few simple rules.
- The party or event needs to be open to all employees
- It is an annual occurrence
- It doesn’t cost more than £150 per head
If you meet the above criteria then there is no benefit in kind on this event and it is allowable for tax.
However BEWARE ..
- This is not a licence to put through the accounts a flat rate of £150
- If the cost is £151 then all of it is taxed as a benefit in kind!
- The £150 includes vat
- You can have more than one event but the £150 is reduced proportionately
- Like all business costs you must have a receipt for the amount spent
- The event must be for all employees and not just directors – except where the director is the only employee
The amount spent up to the limit of £150 is for each employee. So that doesn’t mean that you can take your friends or family out for a slap up meal either!
However it does mean that if you are a directors and employee of your own company then you can have yourself a Christmas meal on the company!
Enjoy and a very early Merry Christmas to your all!