• Skip to main content
  • Skip to primary sidebar

DFC Accountants

Accountancy and Business Services in Cardiff, Wales

  • home
  • privacy statement
  • how we can help
    • accountancy
    • bookkeeping
    • VAT
    • payroll
    • taxation
    • share dealing losses
    • exit or succession planning
    • solutions for you
  • digital tax
  • meet the team
  • wealth management
  • advisory
  • news & updates
  • Login
  • contact us

13/12/2018 Christmas parties

8th December 2018 by

The maximum amount which can be spent on an annual event (such as a Christmas party) for staff is £150 per head, for the event to escape the benefit in kind rules. This cap has not changed for 15 years, and it includes VAT and transport costs.

We are reminding clients of this limit as it applies to the combined cost of all events held for staff during the tax year. If the average cost of the event per head exceeds £150 per head, the full cost of the event is a taxable benefit for the employees, not just the amount above £150. The HMRC employment income manual makes it clear that £150 is a cap, not an allowance.

However, there are other ways in which employers can treat their staff. The trivial benefit rules allow an employer to make non-cash gifts to their employees of up to £50 per time, on an unlimited number of occasions per tax year. If this cap is not breached the gifts are free of tax and NIC. Where the recipient of the gift is a director of the company or family member of a director, the value of trivial benefits is capped at £300 per year, and each individual gift is still capped at £50.

The trivial benefit rules can be used to take staff out for a meal where the cost is no more than £50 per head. Alternatively, vouchers can be given to staff to use for taxis home from the Christmas party, or for them to use at the bar at the party.

You need to be clear that the vouchers are acquired by the employer and given to staff irrespective of whether they attend the event, so the cost of the drink/ transport voucher doesn’t eat into the £150 per head party cap.

Written by the Tax Advice Network

Filed Under: Uncategorised

Primary Sidebar

Contact Us

02920 448 120
julie.burrows@dfcaccountancy.co.uk
Address:
2 Alexandra Gate
Ffordd Pengam
Cardiff, Wales, CF24 2SA

News & Blog

  • Monthly Tax E-News – April 2022 1st April 2022
  • Monthly Newswire – April 2022 1st April 2022
  • Monthly Newswire – March 2022 10th March 2022
  • Monthly Tax E-News – March 2022 1st March 2022
  • Monthly Tax E-News – February 2022 1st February 2022

© 2022 DFC Accountants Ltd · Site by The Clever Web Company

Address: 2 Alexandra Gate, Ffordd Pengam, Cardiff, Wales, CF24 2SA
Email: julie.burrows@dfcaccountancy.co.uk