Is it too early to mention the “C” word?
Hopefully it’s not too early for us to share our advice on how to make sure that your Christmas Party is allowable for Tax.
Follow these simple rules (applicable to Limited Companies only):
- The party or event needs to be open to all employees
- It is an annual occurrence but doesn’t have to be at Christmas
- It doesn’t cost more than £150 per head
If you meet the above criteria then it is allowable for tax without any Benefit in Kind implications.
However BEWARE ..
- This is not a licence to put through the accounts a flat rate of £150
- If the cost is a penny over £150 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 director and employee of your own company then you can have yourself a Christmas meal on the company!