‘Tis the season… to spend a lot of money! As shoppers fight for the best Black Friday and Cyber Monday bargains, limited companies will also be counting the cost of their annual Christmas party.
So what can they claim for? While there is no specific allowance for a ‘Christmas party’ as such, HMRC does provide limited tax relief for the cost of holding an ‘annual event’ for your company.
But before you start pricing up flights to Las Vegas, there are certain conditions that have to be met.
Staff entertainment is considered to be a ‘Benefit in Kind’, and directors and employees would need to pay tax on the amount of that benefit. That means you (or your client) CAN claim for an annual event for yourself, any staff you employ, and your partner, and reclaim the costs against the company, as long as the event does not cost more than £150 including VAT. This cost can be used towards accommodation, transport, and food and drink and the event MUST be free for all staff to attend. You can’t simply make a cash claim for £150 per person, all receipts must be itemised.
Of course, every firm has slightly different tax needs so be sure to contact your accountant if you have any questions about what you can and cannot claim against Corporation Tax.
Tell us on Twitter — what have you or your clients planned for employees this year? Have you spent £150pp? @bondwilliamsrec