Have you Started Planning your Christmas Party?

Make sure it is just that, and not a reward!

Unlike entertaining customers, some of the costs of entertaining employees are generally allowable against business profits.

Generally speaking, as long as the total costs of your parties and other social functions, which you have attended in a tax year, are less than £150 (inclusive of VAT) per person attending, there will be no tax implications.

However, if the event is deemed to be a reward, bonus or incentive then employer would NOT be able to reclaim the VAT, and the employee will be liable for income tax as a benefit in kind.

Beat the tax man, by ensuring that everyone from the office invited to your Christmas party. Keep a good track of all the costs and ensure that they are below the HMRC threshold of £150 including VAT per person attending. This includes all the costs, i.e. room hire, meal, drinks, transport and accommodation.

Our Clarity365 project tracking functionality is perfect for tracking costs for each event. You can allocate all of the party costs and employee expenses, along with electronic copies of the receipts, so that you can demonstrate you are compliant with the HMRC Ruling. Helping you to enjoy the party without the risk of a tax hangover. ​