The Festive Season - Watch the Taxman
4th December 2009
Many businesses will be intending to hold a Christmas party for staff as a thank you for their contribution and to enjoy their company in the festive season. It may come as a surprise, but if you spend too much entertaining your employees then they may be subject to a tax charge on this. Each staff member has a tax free allowance of £150 to cover all such entertainment in a tax year. Therefore, if you also have a summer party or other celebratory events you need to look at all of the events which are being held, work out the overall cost and compare this to the number of staff and the £150 limit. Have a word with us if you have any queries. The calculation is somewhat convoluted, you need to be conscious if spouses/partners are invited.
Also, remember that generally Christmas bonuses are taxable. Small gifts such as a box of chocolates would not be taxable but more significant gifts or cash or cash vouchers should be included in payroll calculations.
For further advise contact Whittingham Riddell on 01743 273273
Happy Christmas!
