Reply to: xmas party CUK article incorrect?

[craig1]

I don't trust accountants to answer things like this properly, they usually give the most cautious answer when they don't know.

What I've done in the past when I have a query like this is call HMRC and ask them the answer. And then make sure I get the call reference number as the answer is logged. Over the years I've found HMRC to be fast and responsive, with a clear and unambiguous audit trail for if someone decides later that they don't it; unfortunately their staffing issues mean they have been getting a bit slower in the last couple of years.

I'm far too tight to pay for an accountant.

[northernladuk]

Visiting accountingweb it’s remarkable how different the answers look depending on the viewpoints of people

Indeed but doesn't help when people try and take the piss by funding family days out for which the rule was never designed.

[eek]

Visiting accountingweb it’s remarkable how different the answers look depending on the viewpoints of people

[TheCyclingProgrammer]

You can’t claim it as an expense. It’s after CT and you can’t have the VaT back either.

A staff annual event is an allowable expense for corporation tax purposes and the VAT is recoverable (even if it exceeds the per head BIK limit).

[Lance]

Like it - then I get a free day out and save on the corp. tax bill

You can’t claim it as an expense. It’s after CT and you can’t have the VaT back either.

[Lance]

The actual legislation makes light reference to attendees who aren't employees, and doesn't say they can't have their own £150 allowance - therefore resulting, I think, in the accountants assumption that they can.

Income Tax (Earnings and Pensions) Act 2003 (note the £75 figure shown was amended in later legislation to £150)

So I'd say it's £150 per head. Although I don't think you're really saving money at all if you go out looking for restaurants where you can pay that much

Yes it is. I have an annual staff party for me. And my guests are wife and child. £450 is a good party. Accountant says it’s fine.

[MrMarkyMark]

Like it - then I get a free day out and save on the corp. tax bill

You catch on quick

[SouthernHarrier]

Why don't you throw the invitation open to any friends and family too.

If you invite enough, maybe the company would actually make a loss that year.

Like it - then I get a free day out and save on the corp. tax bill

[MrMarkyMark]

In our case our annual event is a Motorsports event in the summer. Both my wife and I are directors so budget is max £300. Our two boys always come so in theory could we count them as guests (one per director) and so increase the allowable budget to £600?

Why don't you throw the invitation open to any friends and family too.

If you invite enough, maybe the company would actually make a loss that year.

[TheCyclingProgrammer]

Just wondering whether next year we can go to the poo bar instead of taking my own butties

Hey, whatever does it for you, I'm not judging.

[SouthernHarrier]

Never though of asking my accountant on financial issues. Why didn’t someone say?

[northernladuk]

Enough to afford an accountant?

I very much doubt it.

[BrilloPad]

IMO that is just too thinly veiled. Just looks like a day out with the family to me. Why push it that far? You have worked out exactly how much you will be saving here haven't you?

Enough to afford an accountant?

[SouthernHarrier]

Will they be laying on a conference room?

Not for that price!

[SouthernHarrier]

Yes.

Edit: or more precisely, yes the total cost per head would mean max £600 for 4 people, obviously, but there's no guarantee HMRC would consider a family day out to a motorsports event in the middle of Summer a company annual event. Do you do this on an annual recurring basis?

We've been to the same event as the annual company do for the last 5 years. Not saying I would spend £600 on it, in fact costs have always come in well below £300. Just wondering whether next year we can go to the poo bar instead of taking my own butties