Originally posted by GhostofTarbera
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Previously on "Christmas allowance - personal tax year or company tax year?"
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How would you take this allowance if inside IR35?
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Originally posted by alloverit View PostHi all, asking because my current accountant is giving different advice than previous ones. Is it £150 per head in your company tax year or the personal tax year (Apr-Apr)?
Thanks!
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That's right, I had a Christmas meal and didn't use up to my £150 available so thought about planning another "annual event" to use it. Looks like I'm in to next year already though...
Thanks WordIsBond - answers my problem clearly.
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I know an annual allowance doesn't have to be used for Christmas, but the thread title was a bit of a clue as to the purpose of the proposal.
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Originally posted by PhiltheGreek View PostAs there is only one Christmas in the year, does it matter?
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Originally posted by northernladuk View PostWhy would a company tax exemption be based on your personal tax year?
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Originally posted by PhiltheGreek View PostAs there is only one Christmas in the year, does it matter?
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Originally posted by PhiltheGreek View PostAs there is only one Christmas in the year, does it matter?
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Originally posted by northernladuk View PostWhy would a company tax exemption be based on your personal tax year?
EIM21690 - Employment Income Manual - HMRC internal manual - GOV.UK
Directors and employees, except for 2015/16 and earlier those in an excluded employment (see EIM20007), are chargeable on their share of the expense incurred by an employer in providing a social function for employees, except where Section 264 ITEPA 2003 exempts the charge to tax.
The argument to the contrary, perhaps, is that an employee could work part time for a Jewish-owned company in April that has a big Passover party, for a socialist company that has a May Day party on 1 May and spends £150 per head, and for a Christian-owned company with a big Easter party. Then, he could quit all of those and go work for a Sikh who gives his employees a big party to observe the martyrdom of Guru Arjam and by August could be working for a Muslim who has a big Eid al-adha (non-alcohol) celebration. Finally, he starts his own company and by December wants to make up for the abstinence of the last party and has a drunken fling on the company.
I don't think the tax man is going to try to string all that together and say that you got more than £150 in your personal tax year, so you owe tax and your employers (after the first one) owe NI. Since it is the company that has to figure this out and decide whether to treat it as taxable income, my guess is that technically it may be the personal tax year but everyone just uses the company tax year and no one cares much. But because I'm a nerd and egotistical I decided to try to answer the question without having any firm evidence.
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Why would a company tax exemption be based on your personal tax year?
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