Tax & Accounting News
Don’t be caught out during Christmas party season
12/12/2011
Christmas is here and that means one thing – the traditional office party.
However, while people may think only about the following day’s consequences – the hangover, a drunken clinch etc, businesses should also be aware of the tax implications of having a good time.
The good news is that unlike when entertaining guests, the costs of entertaining employees is generally allowable against the profits of the business.
Tax implications for the individual employee are only applicable if the total costs of all employee annual functions in a tax year are less than £150 per attendee (VAT inclusive).
In considering this limit, businesses need to consider all costs associated with the function including the meal, drinks, entertainment, transport or accommodation.
If the costs are above £150 per head, then the full cost will be taxable on the employee.
