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Christmas Party Tax

Posted on: December 13th, 2012 by Hardeep No Comments

Christmas is fast approaching and that can mean only one thing – the work Christmas party! We’re sure everyone’s talking about it already! It’s a chance for you to reward your employees’ hard work throughout the year and for them to relax, however are you aware that you can reward your employees with a Christmas or annual event up to the value of £150 per employee completely tax free?

Who can come?

You can also invite partners to enjoy the festivities, although this does mean all partners should be invited- sorry! If you work on your own why not treat your husband/wife to a night out? This means you will be able to spend a total of £300 tax free, however if you exceed £150.00 per person even by 1p then the whole amount including the £150.00 becomes a taxable benefit and class 1a National Insurance will be due.

How many parties can I have?

The £150 tax benefit is an allowance for the whole year so if as a company you hold two events, a Christmas party and a summer barbecue then you will need to identify how much you have already spent on the first event to see how much you have left i.e. if you spend £100pp on the summer barbecue then you will have £50pp for Christmas.

 

You must invite all employees and keep all receipts in order to treat this as a non-taxable expense. For more information visit http://www.hmrc.gov.uk/paye/exb/a-z/s/social-functions.htm

 

So treat yourself this Christmas and we hope you have a very Merry Christmas from all at 1CA.

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