Party Time!

 
 

Now is the time of year when we all want to get together and let our hair down a bit but is the cost of holding a party for your staff a tax deductible expense?

In short the answer is a simple, yes, but there are one or two conditions.

  • Before you were thinking of being too generous there is an annual limit of £150 per person including VAT.
  • The party must be for your staff and available to all of them.
  • Please remember the £150 per head limit applies to all the costs including travel and accommodation. The easy way is to add up all the costs and divide it by the number of people.
  • £150 is an exemption but not an allowance. If, therefore, you overspend the entire amount is disallowable.

After all this you may still feel the need to be more generous and ignore the spending limits. That’s completely acceptable but remember it just won’t be a tax deductible expense and you can not reclaim the VAT.

Please remember

The spending limit is an annual figure so if you’d held a summer event then that cost has to be included.

If you were to invite customers or suppliers (this includes subcontractors) it may render the whole amount as not deductible.

If you all have too much of a good time and the expense exceeds the limit (even by 1p) it may create a benefit in kind which has to be declared on a P11d.

Once again there are aspects of this that can make it a tricky area so if you feel the need to get advice please don’t hesitate to call us.