chartered certified accountants
Whether you can believe it or not, Christmas is right around the corner. An expensive time of year for all, but if you’re planning a party for your team, you’ll be able to save on tax!
It may sound like Christmas come early, but in order to have a tax-free party you need to follow these instructions:
To start with, the event (party, meal, etc.) must be open to all of your employees and at one specific location.
Cost per head must not surpass £150 including VAT. Guests/plus ones of your employees also count as guests and are a great way of reducing the cost per head.
To accurately calculate cost per head, ALL costs must be considered. This includes any transport costs to and from the venue, any accommodation provided and so on.
If the cost per head surpasses £150 including VAT, individual employees will be taxable on their average cost PLUS the cost for any guests that were permitted to attend.
Lastly, it’s possible to recover VAT input tax on employee entertainment spend. If guests are permitted, the input tax should be apportioned as VAT applicable to those who are not employees are not recoverable.
However, if you ask guests to pay a reasonable contribution to the event, all VAT can be reclaimed.
Disclaimer: This blog and the information it contains, do not constitute advice from Asquith & Co. We are not responsible for any action taken by the reader, and if the reader acts on this information, they do so at their own risk. If you would like assistance with any of the matters contained in this blog or with anything else, contact us on 01723 366102.