Reply to: 'Christmas Party' paid expenses limit?

[blinko]

thanks for this write up, much appreciated

[sreed]

Sorry to bump an old thread, however it seemed the best match.

As the season of goodwill to all approaches, being a newbie and still finding my feet in the contracting world, I got a couple of questions about the Christmas party tax relief. some of its been mentioned here, but quite a while ago, and things might have changed.

My understanding, it's still £150 a head, not a penny more, and as a once a year "event".

I'm the director of a ltd company with myself as the only employee. So I guess I got £150 to play with. However It's also been suggested that my partner would also qualify for £150. Not sure about this, she isn't an employee or director.

So the first question; Do I get £150 or £300 to "play" with?

Second question; what is eligible...

I'm taking the missus away late November for a weekend away, and whilst the hotel bill exceeds this, I figured I might be able to put a couple of meals through and some drinks in various establishments over the weekend

Would that work? Essentially keeping as many receipts around meals and drinks from wherever and whenever on the trip and mixing and matching (and ignoring) to get as close to £150 (or £300) as possible?

It’s actually quite liberal in what it allows. Just keep the following in mind -

- As a Director, you are entitled to provide an annual event (or multiple events) for yourself, any employees, and your partner, and put it through as a cost to co. as long as it does not exceed £150 (inc VAT).

- The cost per head can include accommodation, travel, food+drink

– it must not exceed the £150/head threshold, even by a penny.

- if you have non-family employees, the event must also be open to them as well

- you can have several events throughout the year, but the total cost must not exceed the £150/head threshold.

- you do actually have to hold the event.

- the cost per head is calc by dividing the total cost by the number of attendees (including non employees)

I have done similar to what you have proposed over the last many years, but to keep it simple and meet the general idea of an ‘event’ all costs claimed were captured in one or two receipts covering a single day.

[northernladuk]

Sorry to bump an old thread, however it seemed the best match.

As the season of goodwill to all approaches, being a newbie and still finding my feet in the contracting world, I got a couple of questions about the Christmas party tax relief. some of its been mentioned here, but quite a while ago, and things might have changed.

As a newbie your first port of call is your accountant. They are the tax professionals that you pay for advice. We are just a bunch of contractors.

My understanding, it's still £150 a head, not a penny more, and as a once a year "event".

I'm the director of a ltd company with myself as the only employee. So I guess I got £150 to play with. However It's also been suggested that my partner would also qualify for £150. Not sure about this, she isn't an employee or director.

So the first question; Do I get £150 or £300 to "play" with?

You aren't an employee either. You've got to be very clear about this. If you don't know then ask your accountant. You are an officer of the company and don't need to be an employee. If you are an employee then you have to pay yourself National Minimum Wage which means you'll lose a good chunk of the efficiency of a LTD. But you are still valid being an officer.

Second question; what is eligible...

I'm taking the missus away late November for a weekend away, and whilst the hotel bill exceeds this, I figured I might be able to put a couple of meals through and some drinks in various establishments over the weekend

Would that work? Essentially keeping as many receipts around meals and drinks from wherever and whenever on the trip and mixing and matching (and ignoring) to get as close to £150 (or £300) as possible?

Keep it to an event, not a weekend away IMO.

All your answers are in this thread somewhere and clearly explained in this article.
https://www.contractoruk.com/limited...exemption.html

[hobnob]

I'm the director of a ltd company with myself as the only employee.

Just to nitpick, are you sure that you're an employee? I.e. do you have an employment contract with your own company? (That's unusual for a director.)

To answer your other questions, I believe that your partner would also qualify for the £150 limit, i.e. it's £300 in total which can be split equally between both guests.

It doesn't have to be for a single event, e.g. you could have a summer party and a Christmas party, as long as both are repeated each year. However, having several "micro-events" over the course of a weekend feels a bit iffy to me.

Basically, if you said that you were both going to go out to a nice restaurant near your house and get food/drinks, that would be fine.

If you cherry-pick parts of the event (e.g. paying for a meal but not a hotel) that starts to get tricky. However, if you happen to be away from home anyway (regardless of this event), and you go for a meal in the other location, I think that's justifiable. When I was a permie in London, there were Christmas parties away from the office, and they left it up to staff to make their own way there (assuming that most of us would have travelcards), i.e. that wasn't part of the £150 budget. Similarly, if people chose to stay overnight at a Travelodge rather than catching the last train, that was up to them personally, and not part of the event budget.

If you say "we're going to a pub on Friday evening, then out for a meal on Saturday evening, and lunch on Sunday" then that's not really an event anymore. So, my advice would be to just pick one.

[pr1]

No. £150. Who suggested it was £300?

this thread

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.

[WTFH]

I'm the director of a ltd company with myself as the only employee. So I guess I got £150 to play with. However It's also been suggested that my partner would also qualify for £150. Not sure about this, she isn't an employee or director.

So the first question; Do I get £150 or £300 to "play" with?

No. £150. Who suggested it was £300?

[VimFueago]

Sorry to bump an old thread, however it seemed the best match.

As the season of goodwill to all approaches, being a newbie and still finding my feet in the contracting world, I got a couple of questions about the Christmas party tax relief. some of its been mentioned here, but quite a while ago, and things might have changed.

My understanding, it's still £150 a head, not a penny more, and as a once a year "event".

I'm the director of a ltd company with myself as the only employee. So I guess I got £150 to play with. However It's also been suggested that my partner would also qualify for £150. Not sure about this, she isn't an employee or director.

So the first question; Do I get £150 or £300 to "play" with?

Second question; what is eligible...

I'm taking the missus away late November for a weekend away, and whilst the hotel bill exceeds this, I figured I might be able to put a couple of meals through and some drinks in various establishments over the weekend

Would that work? Essentially keeping as many receipts around meals and drinks from wherever and whenever on the trip and mixing and matching (and ignoring) to get as close to £150 (or £300) as possible?

[northernladuk]

no not tesco.. £55 a head at a hotel and I'm sure I could get a receipt.

Bit more information when you are asking questions might actually help a little. We aren't mind readers.

Fill your boots then. Im sure HMRC have got more to worry about than the definition of a Christmas party.

[cjonline]

Can you provide a receipt for it?...not the Tesco's one.

no not tesco.. £55 a head at a hotel and I'm sure I could get a receipt.

[northernladuk]

Can you provide a receipt for it?...not the Tesco's one.

[cjonline]

can I claim a christmas day dinner for me and my partner on christmas day and put that through as the "Christmas Party"?

[northernladuk]

I have absolutely no qualms over that one whatsoever since I look on taxation as legalised theft.

Back to General from whence you came.

[Gumbo Robot]

There's two very different things, which sometimes get confused on this forum:
1) is something ok to do?
2) will you get away with it?

You are of course right that if you spend (say) £250 on a party, and put it to staff entertaining, HMRC will likely never look at it as they'll imagine it was a relatively swanky night just for staff (plus it's only £250, no huge tax loss). If it may have actually been a modest cost per head night for 20 potential clients, HMRC wouldn't know, so it's unlikely to get challenged...but that doesn't make it right.

No different to putting a holiday under travel and subsistence, or a big TV for your home under computer equipment.

I have absolutely no qualms over that one whatsoever since I look on taxation as legalised theft.

[Gumbo Robot]

Indeed but if you do get investigated for any reason they will go through everything with a fine toothed comb. People that don't comply with the odd rule also have a tendency not to bother with many others.

Well I guess the trail would stop dead at my local pub in that case.

Don't think the landlord is too diligent with his paperwork & they'd never be able to reconcile my debit card receipt with the chitty with my orders on.

[MrMarkyMark]

Indeed but if you do get investigated for any reason they will go through everything with a fine toothed comb.

Indeed they do.
We had the VAT man round for four days going through my old mans books.

Fine toothed does not begin to describe it.