Waters and Atkinson Chartered Accountants’ Post

🎄So the other day I posted about Christmas parties and whether or not you can put the cost of these through your business as an expense. How about Christmas gifts? 🎅🏼Gifts for employees, up to a value of £50 each (including directors) can fall under “Trivial Benefits”. This means they do not count as a benefit in kind and are tax deductible, as long as they meet certain conditions: 🎁No single gift can exceed £50 (including VAT) and as this is not an allowance, the whole cost of any gift exceeding this amount would become ineligible. 🎁The gift must be a genuine gift and not a contractual obligation or a reward, eg. for performance or hitting a target, etc. 🎁Only gifts for employees count – gifts for clients, suppliers or subcontractors will count as entertainment, which is not tax deductible. 🎁The gift must not be cash or a voucher which can be exchanged for cash (normal shop gift vouchers up to the value of £50 are fine). 🎁The total annual cap for directors is £300. So this could be 6 individual gifts of up to £50 each – you can’t do a single £300 gift! But you can be clever and separately buy 6 x £50 gift vouchers for the same store and gift these separately. 🍾So what can you buy as gifts? Anything as long as you meet the above criteria! So as well as gift vouchers for shops, restaurants, cinema, beauty salon etc, you could buy Champagne, flowers, a food hamper or even toys for your employees’ children. 🙂And you don’t have to restrict your gifting to Christmas time – you can use trivial benefits throughout the year, as long as they meet the conditions above! 💁🏼♀️Make sure you let your bookkeeper know that you’d like a purchase to fall under trivial benefits, so they don’t confuse it with a personal expense paid out of the business in error! 

🎄🎁 Spread Holiday Cheer with Trivial Benefits 🎅✨ As the festive season approaches, here’s a great way to thank your employees without worrying about extra tax! Trivial benefits allow you to give tax-free gifts during Christmas—here’s how it works: What Are Trivial Benefits? 🎄 To qualify as a trivial benefit, the gift must: ✔️ Cost £50 or less per gift (including VAT). ✔️ Be non-cash (no bonuses or cash vouchers). ✔️ Not be given as a reward for work or performance. ✔️ Be for personal enjoyment. 🎁 Examples of Festive Trivial Benefits: A box of chocolates 🍫 A bottle of wine 🍷 Festive hampers 🧺 Key Points for Directors: 🎅 Directors of close companies can receive trivial benefits too. You can gift yourself up to 6 benefits of £50 each, totaling £300 per tax year. 🎄 Spread the Festive Spirit: Pair trivial benefits with your Christmas party for an extra tax-efficient celebration! 💡 Need help navigating these rules or planning your festive perks? Let us make your finances merry and bright this holiday season!

Christmas is coming!   If you’re a limited company owner and want to spread some holiday cheer by giving festive perks to your employees and clients, here’s how to do it in a tax-efficient way.   You need to consider two key aspects:   1) Whether the cost qualifies as an allowable expense for business tax purposes. 2) Whether it counts as a taxable benefit for employees, reportable via P11Ds.   Here is a guide to festive perks that are tax-deductible for limited companies and non-taxable benefits for employees.   💫 Gifts to employees   - You can give tax-free gifts worth up to £50 per gift (incl.VAT) - known as trivial benefits. Note that this excludes cash, cash vouchers, or rewards for work performance. - The same £50 limit applies to directors. However, be mindful that directors can only receive trivial benefits of up to £300 per tax year (i.e., six £50 gifts). 💫 Christmas party allowance - There is an annual allowance of £150 (incl. VAT) per employee for Christmas parties or similar events. The event must be open to all employees. Each employees can bring one guest. The guest also gets £150 allowance. - The £150 allowance is per head for the tax year, not per event. If you hold multiple events, and their combined costs exceed £150 per head, you can select the most expensive event to use the tax-free allowance.     💫 Gifts to clients Gifts to clients are tax-deductible, if they: - Cost no more than £50 per client per year. - Are branded with your company’s name or logo. - Are not food, drink, alcohol, tobacco, or vouchers. Hope you make the most of the festive season while keeping things tax-efficient!

Did you know? Your Christmas parties and festive perks could be more than just fun—they can also be tax-efficient! Here's how: Trivial Benefits... Spread festive joy with gifts like chocolates, wine, or a festive lunch! As long as they’re: 🎁Under £50 per gift 💸Not cash or cash vouchers 🏆Not tied to work performance …they’re totally tax-free for your employees and you don’t need to let the HMRC know! Christmas Parties... Celebrate the season with a party (or even two!). If your celebrations are: 👥Open to all staff 👥 🍸Costing £150 or less per person 🎄 …you’re in the clear—no tax or National Insurance to worry about! 🎉 So, treat your team to some festive cheer without the taxman being a grinch! 🎅✨ Need help navigating the festive fine print? Give us a shout—we’ll help you! #TrivialBenefits #ChristmasTaxTips #FestiveFinance #AccountancyFun

As the festive season draws near, you’re probably gearing up for year-end celebrations and thinking about Christmas gifts for your valued customers, clients and employees. During this time, it’s important to consider the impact of Fringe Benefits Tax (FBT) on your generosity to avoid any unexpected tax consequences for your business. Here are some guidelines to help you navigate FBT this Christmas: Christmas Parties - If your business submits an FBT return and uses the 50/50 split method for entertainment, 50% of the cost of your Christmas party will be subject to FBT - If you don’t use the 50/50 method, your Christmas party costs can be exempt from FBT if one of the following applies: - The party is held on business premises on a working day and only current employees attend, OR - The party costs under $300 per person. If your business provides entertainment to employees more than 10 times a year, your Christmas party may still be subject to FBT regardless of cost. Be sure to consult with your Accountant or Bookkeeper!

🎄 Spreading Christmas Cheer – Within the Limits! 🎄 Yes, I know I mentioned the C word 😬 With Christmas approaching, many businesses are looking for thoughtful ways to show appreciation to their teams. A festive gesture can mean a lot, but it’s important to keep within gift guidelines – especially when it comes to tax rules and company policies! ✨ Here’s a quick guide to navigating Christmas gifting for staff in the UK: 🎁 Stick to the HMRC ‘Trivial Benefits’ Rule: Gifts worth up to £50 per employee don’t count as a taxable benefit, as long as they aren’t a reward for work. Perfect for small treats like vouchers, festive hampers, or holiday-themed goodies! 🎁 Watch Out for Cash or Bonuses: Cash gifts, including vouchers that can be exchanged for cash, are usually taxable. HMRC sees these as income, so consider a thoughtful non-cash gift instead. 🎁 Create a Team-Wide Celebration: Instead of individual gifts, you could plan a team lunch, host a holiday quiz, or arrange a fun virtual event if you’re remote. These events build morale without falling into taxable benefit territory. 🎁 Respect Diverse Traditions: Keep in mind that not everyone celebrates Christmas. Consider inclusive options or offer a winter-themed gesture that everyone can enjoy. Gifting within these guidelines shows appreciation without extra paperwork or tax worries – making it a win-win for everyone! 🌟 #onyourside

With the festive season approaching, it's important to understand the Fringe Benefits Tax (FBT) implications for Christmas parties and staff gifts. Christmas Parties: On Business Premises: If a Christmas party is held on a working day at your business premises and attended only by current employees, the food and drink provided are exempt from FBT. Off Business Premises or Including Associates: If the party is held off-site or includes associates (e.g., employee partners), FBT may apply unless the cost per person is less than $300, qualifying it as a minor benefit exemption. Clients Attending: There is no FBT on benefits provided to clients. Staff Gifts: Non-Entertainment Gifts: Items such as hampers, vouchers, or bottles of wine costing less than $300 per employee may be exempt from FBT under the minor benefits exemption. Entertainment Gifts: Gifts like tickets to concerts or holiday accommodations are considered entertainment and may attract FBT, even if under $300. Record Keeping: Maintain detailed records of all expenses related to Christmas parties and gifts, including costs, attendees, and the nature of the benefits, to ensure compliance and assist in determining any FBT liabilities. For comprehensive information, refer to the Australian Taxation Office's guidance on Common entertainment scenarios for business - https://lnkd.in/giHeETH9

Christmas gifts and entertaining for UK Limited Companies 🎅 As the holiday season approaches, we’re aware you may be thinking of spreading some festive cheer. To help, we’ve put together a quick guide on Christmas gifts and entertaining that can be claimed through your UK limited company. 🎁 From employee rewards to client appreciation, this blog breaks down what’s allowable and how you can make the most of the festive season. 👉 Click here to read the blog - https://lnkd.in/e-X9XTrV If you have any questions or need advice tailored to your business, feel free to get in touch. 📱 We’re here to help you make this Christmas both merry and tax-efficient! #smallbusiness #christmasgiving #christmasgifts #taxcompliance #uksmallbiz

Can you believe 4 weeks today will be Christmas Day?! Maybe you're wondering "What’s a Virtual Assistant got to do with Christmas?" 🎄 As a business owner, the festive season often feels like a whirlwind. Tight deadlines, year-end tasks, and planning ahead for time off can leave you with little time to enjoy the build up to the holidays. That's without even factoring in the Christmas shopping, and if you're a parent, the never ending list of school festive events... But here’s the thing: It doesn’t have to be that way. Imagine having a Virtual Assistant by your side to share the load. From handling admin, social media and clearing your To Do list, to simply keeping things ticking over while you focus on your priorities, a VA can transform how you approach the busiest time of year. While it might be too late to change the game for this Christmas, now’s the perfect time to plan ahead for 2025. Start planning now, and by next Christmas, you’ll be thanking yourself for putting the right support in place! 🎅🏻🎅🏻🎅🏻🎅🏻🎅🏻🎅🏻🎅🏻🎅🏻🎅🏻 Featuring a festive coffee on the move, sponsored by a reward voucher from a well known comparison site. I know it's still only November but it's festive drinks and Christmas socks all the way for me from here!