25/11/2024
Its the Christmas season so here is run down of the HMRC rules surrounding gifts and parties....🎊🎁
Thinking of giving your staff gifts this Christmas? As long as the gift is considered "trivial," there will be no Tax or National Insurance to pay. What's more is there is there no limit on the number of trivial gifts given😁
A trivial benefit is any gift that costs £50 or less, including VAT and delivery. This could include items like a bottle of wine, a bouquet of flowers, or a box of chocolates. Just ensure it is not performance related!
With the Christmas Party season fast approaching, you may be wondering what qualifies as a staff Christmas party. More importantly, we’ll explain how to ensure the costs are deductible for corporation tax and that no tax or National Insurance is charged to your employees.
Generally, entertaining staff is a tax-deductible expense for the business, and this includes costs for staff and their partners.
However, entertaining non-staff, such as customers or suppliers, is not tax-deductible.
For events where both staff (with their partners) and non-staff (such as customers) attend, the costs must be divided and apportioned accordingly.
A Christmas party is not taxable for staff, provided it meets all of the following conditions:
- It must be an annual party or social event, like a Christmas party or summer BBQ.
- It must be open to all staff members.
- The cost per person must not exceed £150, including VAT (per year, not event!)
So whether you're a Ltd company or a Sole Trader, treat yourself and your teams to a festive get together🥳
If you need help with your Self Assessment or annual accounts filing, don't hesitate to get in touch with [email protected].
