There are tax breaks available for your company Christmas party. But some little traps that could cost, so beware.
Last year we reminded you that HM Customs and Revenue are capable of a little Christmas cheer. But there is a sting in the tale.
Essentially there are some tax breaks that can be applied to this year’s Christmas parties. Firstly remember that VAT can be reclaimed on the employee element of the expenditure. Secondly expenditure below £150 per head is exempted as a benefit in kind: so nobody has to pay tax for their treat.
So what are the downsides? Well for one thing if the costs of the party (or parties because the benefit can be spread over the year) exceed £150 per head then all of the costs are counted as a taxable benefit. And secondly costs include everything; food, disco, flowers. The lot. Suddenly that £150 allowance doesn’t seem quite so generous does it?
If you need advice on sorting out the tax situation for your company Christmas festivities then call us on 01384 235549 or email email@example.com
Lewis Smith & Co. – Accountancy for start-up business in Dudley.