Xmas party time is almost upon us. Obviously depending on the current situation due to the Coronavirus, you may want to invite your employees to the Xmas party; if allowed. It is an exceptionally good way to show your employees appreciation and to build a team spirit.
5 reasons to have a Xmas party:
- The costs are qualifies as expenses – The costs per employee cannot exceed £150 – including meals, transport, and overnight accommodation
- You can deduct additional £150 per partner invited by your staff – cost is per ‘head’
- By deducting cost you lower your corporation tax
- Employees will appreciate you, you build good working environment and potentially your employees will identify with your company and may be more loyal
- Potentially you can claim back the VAT
You must remember few important BUTs:
- The cost per person cannot exceed £150.00, even for a penny
- Limit of £150 is applied to all the parties, so if organise more than one total annual cost per head is £150
- You have to keep all the receipts; you cannot just deduct £150 without the proof
- The party has to be open to all employees, not only directors, unless all your staff are directors
- The party must take place, you cannot just plan it
If you need any more information, please contact me.
Need help?
Need an accountant? Call me now!
Similar articles:
Trivial benefits
I don’t know how many of you knows anything about trivial benefits. Many times, as an employer, you may think how to reward your hard working employees, give them something extra, some small token and in present climate save on taxes. As an employer you can buy your...
Business Entertainment
What is business entertainment and can we classify it as business expenses? What is classified as a business entertainment in relation to the clients: Food and drink Presents Cinema or theatre tickets Sports events tickets Entries to the clubs One would think that if...
CIS – what is it, what for and what to do with it?
CIS (Construction Industry Scheme) is a tax deducted by the contractor from the subcontractor's salary and transferred to HMRC. In other words, it is a tax that must be declared during self-assessment tax return and usually the overpaid amount is refunded....