With Christmas coming up, it might be a good idea to think about how the festive season can save you tax.
Staff parties, which are typically held at Christmas, can be claimed as tax-deductible business expenses, as they are providing entertainment to you and your staff. And the party won't just limited to members of your company; partners of staff members can also attend.
Other events, such as summer BBQs or staff days outs, are also options for your staff party.
In order to ensure that companies don't go overboard, HMRC have set some guidelines.
- £150 should be allocated for each attendee. This includes everything (travel, food, drink, tips). If you exceed the £150 limit, then the full amount will be a taxable benefit, and will need to be reported on the P11D for each staff member. The good news is that spouses and partners are also allowed this £150 tax-deductible amount.
- This £150 limit is applicable for the entire financial year. This means that you won't be able to have multiple staff parties with this spending limit.
- It will need to be an annual event. Other possible events, such as leaving drinks or a team building event, won't count in this.
If you want further advice on how to organise a staff party, don't hesitate to give us a call today.