It’s nearly that time of year again – time to organise the work’s Christmas party. So what can you claim from HMRC?
HMRC allow an exemption from tax, National Insurance and reporting if it’s an annual event, open to all employees and costs no more than £150 per head.
If the event costs more than £150 per head, you can’t get the exemption, not even on the first £150. You can, however, hold more than one party and as long as everyone’s invited to all of them, they are annual events and the total cost doesn’t exceed the £150 you get an exemption.
You can also claim the £150 for guests of employees. So let’s say your business has 5 employees, including you if you’re a director, and each employee brings a guest. As there are a total of 10 people at the event, as long as the bill doesn’t exceed £1500, nothing need be reported from a tax perspective and it can go through your annual accounts as an allowable expense.
But I’m the only one in my business – what then?
Well, if you are a director, you are an employee so the £150 exemption is available – you could even take your partner out and go for £300!
If you’re a sole trader – it’s not so much fun – you’re not an employee so anything you spend on a Christmas do is part of the money you take out of this business i.e. your drawings.
If you want anymore information on this or any other allowances you can claim give us a call on 01273 454363