🎄If you have staff you might be planning a Christmas party for your team. So, can you put the cost of this through the business as an expense, and will it count as a taxable benefit for your employees?
🥳The good news is, as long as your party (or event/dinner/etc) fulfils certain conditions, it can be exempt. It must:
🎉be open to all of your employees (ie. not just directors or management),
💃🏼be an annual event (not necessarily a Christmas event – it could be a summer party),
🪩and the cost must not exceed £150 per person.
🥂The £150 per head can be split across more than one event, for example you could have a summer party and spend £75 per head, and then a Christmas party at £75 per head, but the combined cost must not exceed £150.
❄️This £150 is not an allowance. If you go over £150 on a single event then the full cost becomes a taxable benefit and needs to be reported to HMRC on a P11D form, and you as the employer must pay Class 1A National Insurance on the full cost of the event. For multiple events, the event which takes the per head spend over the £150 threshold becomes exempt and the full cost of this event is treated as a taxable benefit as above (ie. not just the excess).
💁🏼♀️Please get in touch if you have any questions!