Over the course of the festive season we’ll be bringing you an advent calendar’s worth of tax and financial tips. Some of them might even be a little Christmassy! First up…
Have a Christmas Party
Behind the first door is something that should put you in the mood for the holidays: an annual Christmas party. This isn’t available to sole traders – bah humbug – but companies can treat their staff to a tax free Christmas event, be that a party, meal, night out or adventure day.
To be tax free, the total cost of all annual events – including VAT and travel and accommodation costs – must not come to more than £150 per head per tax year. The great thing is that plus-ones can be invited and they can also have up to £150 spent on them in the tax year.
Beware 1: This is not an allowance so if your Christmas party works out at £151 per head then each employee will be taxed on the full £151 cost.
Beware 2: Be careful if you put on more than one annual event. If you have an annual team building day and this costs £100 per head, then you would only be able to spend £50 per head on your Christmas party if it is to be tax free.
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