How to enjoy a Christmas Party with your team that is fully tax deductible!

How to enjoy a Christmas Party with your team that is fully tax deductible!

It’s not too early to mention the “C” word and everywhere we look on our high streets, online and on television, it’s a myriad of festive adverts and promotions.

In your office you’ve no doubt planned, or are planning, how best to celebrate with your team in this festive season.

So 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.

If you’re a Limited Company and you follow these rules your party can be 100% tax deductible:

  • Your 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 (including any transport & accommodation)

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 is inclusive of VAT
  • You can have more than one event, however the £150 per head must not be exceeded in the year
  • Like all business costs, you must have a receipt for the amount spent
  • The event must be for all employees and not just directors
  • Where the director is the only employee this allowance is not applicable and cannot be utilised
  • These events must be primarily for entertaining staff. So you can’t use this allowance to take your friends or family out for a slap up meal either!

If you need further advice on tax allowances call our friendly and experienced team today on 0121 753 5522 or contact us  Alternatively, you can drop us a line using our online enquiry form