'Christmas Party' paid expenses limit?

[SpontaneousOrder]

Who said I was providing an advice?

Please explain why it is incorrect. As a contractor I am not invited to the parties paid by the client, unless explicitly told.

Fed up with so called moderators turning a public forum into a pprivate sandbox for the "chosen few".

It's not a public forum. It's a private forum, and we are guests.

[ContractorBanking]

What's the situation with Director and Co Secretary of Ltd Co (husband and wife) team?

Is it £600 total for the year? ie each person plus guest?

If so, can you spend that £600 over the course of the year on just yourselves, so it's only the husband and wife that benefit, no other guests?

[northernladuk]

I don't know why we go over this every year. There are hundreds of posts to be found using the search, it's covered in the expense guide to the right and there a number of articles on CUK about it not forgetting google. This is a pretty good breakdown with examples.

http://www.contractoruk.com/limited_...mas_party.html

[northernladuk]

What's the situation with Director and Co Secretary of Ltd Co (husband and wife) team?

Is it £600 total for the year? ie each person plus guest?

If so, can you spend that £600 over the course of the year on just yourselves, so it's only the husband and wife that benefit, no other guests?

The link above explains it's director and employee over 8.5k a year (I'd guess that number has changed though). Being a company secretary probably doesn't count on its own but if she is paid over 8.5k then she would be classed as an employee.

xpert’s Answer:*As a contractor and director of your own limited company you can claim the exemption to cover the expense of an annual function or party of up to £150 per employee or director per annum. The provision of a party is regarded as a benefit in kind and would be taxable if the recipient is a P11D employee (i.e. one earning at a rate of at least £8,500 p.a.) or a director. No tax charge arises, however, if the conditions explained below are met. The exemption is only relevant in relation to P11D employees and directors, no taxable benefit is available if the partygoer is a P9D (i.e. earning below £8,500 p.a.) employee.

[NibblyPig]

Can I have a party for just me?

[Crossroads]

Always someone trying to take the piss whilst failing to understand the rules.

Not at all. Just looking at how it could easily be misinterpreted. As it turns out my understanding was correct, however some of the content of this thread had me questioning myself.

[PerfectStorm]

Can I have a party for just me?

As long as you can provide a receipt for 4 cans of Stella and a copy of Razzle, yes.

[DannyF1966]

I'm still confused! This link (Contractors' Questions: Can my limited company fund a Christmas party? :: Contractor UK) says that the allowance is for directors only, so if I invite my non-director partner to a meal, the amount allowable is £150, because my partner isn't a director. But the link at EIM21690 - Particular benefits: annual parties and other social functions says "Divide the total cost of each function by the total number of people (including non-employees) who attend in order to arrive at the cost per head."

So if I want to treat myself and my non-director partner to a fancy meal in a hotel and stay overnight, am I allowed £150 or £300?

I'm leaning towards believing the hmrc website over the contractoruk site, but the information on those pages seem to contradict each other.

[TheCyclingProgrammer]

How many times does it need to be explained? It's not rocket science.

It's not a bloody allowance.

There are two things to consider:

1. Does the event qualify as an annual event for the purposes of entertaining employees. If yes, the total cost can be paid by YourCo and is tax deductible. There is NO LIMIT on what it costs as long as it is primarily entertaining employees.

2. Does the event count as a taxable BIK on each employee? This depends on the cost per head.

YourCo can pay for an annual event for its employees.

Non employees can be invited (partners, clients, suppliers etc.) but the primary purpose of the even must be for the benefit of entertaining it's employees, not clients or other non employees (interpret that how you wish but to me its all about context - a large company with 100 employees attending and a few non employee guests or clients is probably fine but does that mean a one man company can invite everyone and their dog? No!)

As long as the above applies, then the total cost of the party including the costs of non employees can be treated as a tax deductible expense for the business.

In order for the party to not be a taxable BIK for each employee, the total cost per head must not exceed £150. Include all guests (including non employees) and all related costs when calculating this figure.

IT IS NOT AN ALLOWANCE. YourCo puts the ACTUAL cost through its books. And if the cost per head exceeds the above amount, the employee is taxed on the ACTUAL cost per head for themselves plus any spouse or household members that attended with them.

So to keep it simple, YourCo can pay for you and any other employees to have an event/meal/whatever. It's probably fine for you to invite one non-employee guest. Keep the total cost per head below £150 and there's no BIK and YourCo can use the cost to reduce its CT bill.

[Andrew@Wisteria]

I was invited to a clients Christmas Party once. I did go, free three course meal at Hawksmoor Spitalfields, don't mind if I do.

Careful, it might affect your IR35 status . Not that it will matter soon once the likely new rules come in!