xmas bash

[TheFaQQer]

PCG had a Q&A on this yesterday on their website.

Linky

[wurzel]

From Nixon Williams factsheet:

Annual Event
An annual event, commonly a Christmas Party, is an allowable expense for the company and is treated as a tax free benefit for
the employees providing you meet the following conditions:
• The total cost must not exceed £150 (inc VAT) per head – if the cost is just 1p over then the whole cost will be subject to tax
and NIC, not just the amount over £150
• The event must be open to all staff, although in reality that will just be you!
• Partners may be invited, but if partners are invited, all staff must be entitled to invite a partner – invited partners will count
for the £150 per head allowance.
Generally it would be advisable to limit the annual event to one a year (most clients hold this at Christmas) so that you can
easily determine the total cost to ensure it is below the £150 per head and it is easier to justify as an annual event. If you are
not on the Flat Rate VAT scheme, VAT may only be reclaimed on the portion relating to employees i.e. the VAT relating to invited
partners may not be reclaimed.
However, you can hold more than one annual event and provided the total cost of all these annual events does not exceed the
£150 per head allowance no taxable benefit will arise. If you are holding multiple annual events you need to be able to justify to
HMRC (if questioned) that they are truly annual events i.e. a summer barbeque, a winter ball etc. rather than just a night out for
your employees every now and then.
Business Entertaining
Business entertaining is not an allowable expense for corporation tax purposes
so, whilst you can claim for any such entertaining through the company, the cost
will be disregarded when calculating the taxable profits of your company (see our
corporation tax factsheet for further details).
From the owner manager point of view, even though no corporation tax relief is
received, it is still better for the company to pay for business entertaining (this
includes reimbursing you for business entertaining) compared to you suffering
the costs personally and not being reimbursed because you are not paying for
the entertaining out of taxed income i.e. net pay of dividends.
When considering business entertaining you should be happy that the costs
involved are justifiable as a business expense even though no corporation tax
relief is received. This would be in terms of the costs involved being justifiable
compared to the expected benefits the company will receive.
It would seem un-reasonable for you to spend £5,000 on a box for the day at Old
Trafford for a potential customer if it would only generate a few hundred pounds
of income. In this case HMRC may deem there to be a personal benefit and tax
you (the employee) accordingly. Compare this to spending £50 on a few drinks
after work on the last day at your clients site which could help generate a 3 or 6
month contract in the future, clearly this would be ok as business entertaining.
Gifts to customers are also not an allowable cost and would be treated as
entertainment expenses unless they meet the following conditions:
• The gift costs less than £50
• The gift must bear a conspicuous advert for your company
• The gift cannot be food, drink, tobacco or vouchers.

[Old Greg]

Here's a link to the 2009 thread, linking to the 2007 thread, linking to HRMC

Or just use the FAQ service in my signature for a swift and professional response.

[TheFaQQer]

Can someone less lazy than me please post a link to the official allowance?

I want to see if it's finally worth me getting a round in at the traditional mad friday Christmas bash if I can claim it as an expense.

Here's a link to the 2009 thread, linking to the 2007 thread and linking to HRMC

[TheFaQQer]

me and some mates normally go for a curry in february and i put it through as the christmas party, the amount is for the whole year not just for christmas

It doesn't have to be all in one go, either.

If you go over that, though, then you pay tax on the whole of the last party, though.

e.g. party one averages £60 a head. Party two averages £200 a head. Tax is due on the £200.

[PAH]

Can someone less lazy than me please post a link to the official allowance?

I want to see if it's finally worth me getting a round in at the traditional mad friday Christmas bash if I can claim it as an expense.

[MrRobin]

!! I always though it was £150 per employee only. Any guests had to come out of that employee limit i.e. 1 guest and 1 employee = £75 each...

Right. £300. That's a lot of partying.

[FiveTimes]

I'll be using my allowance for our trip to London in Feb

[Support Monkey]

me and some mates normally go for a curry in february and i put it through as the christmas party, the amount is for the whole year not just for christmas

[lukemg]

300 quid ? for the stuff she likes it's 6 months of fun...

[PAH]

Worth doing if you were going to do this sort of thing anyway, otherwise you're just burning capital regardless of any tax breaks.

A few mates who had a ltd company some years ago only ever held one official crimbo do for friends and family (they had no staff as it was just a small company). After the usual moaning about not having certain nosh or more free beer/wine they said sod it and just went on an all day piss-up themselves instead from then on.

So if you're doing one keep it small and don't expect any major benefits unless the missus or secretary usually gets frisky after a few drinks.

[oracleslave]

Also says it doesn't have to be a single bash

Yeah, if you and the missus stick to that cheap asda cider she likes so much it's party all week!

[lukemg]

The amount of £150 is per attendee and not just for employees (ie partners/spouses who attend have their own exemption limit of £150)

Also says it doesn't have to be a single bash

???? So me + missus can go on lash in dec as long as we keep it under 300 notes ??

Is this true and WTF have I been doing not using this over the years.