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November 2014

Christmas parties for employees

With the season for workplace parties fast approaching we thought it would be a good idea to remind you of the tax implications of these type of events.  

The good news is that, unlike entertaining customers, the costs of entertaining employees are generally allowable against the profits of the business.

But what about the tax consequences for the employees themselves?  Is it a perk of their jobs and will they have to pay tax on a benefit?

Generally, as long as the total costs of all employee annual functions in a tax year are less than £150 per attendee (VAT inclusive) there will be no tax implications for the employees themselves.  In considering this limit make sure you have included all the costs, which may include not only the meal itself but also the drinks, entertainment, transport and accommodation that you provide.

If the costs are above the £150 limit then the full cost will be taxable on the employee.    

If this is to be the case, then please contact us on 024 7651 8555 or 0121 711 2468 so we can advise the best way to deal with them.