Staff Parties: Taxable Or Not?

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George Banks | Towers + Gornall

 

To be exempt from having to be reported by the employer on form P11D, Christmas parties and other similar annual social events must be open to all staff and must actually be annual events.

There is a limit of £150 per head, which is calculated by taking the total VAT-inclusive cost of the event (transport and accommodation expenses are allowable, insofar as they relate to the event) and dividing the total by the number of attendees, which can include partners of employees.

If the cost per attendee exceeds £150 for a single event then not only would that event be deemed a taxable benefit-in-kind (BIK) but so would all other such events in that tax year. If, during the tax year, the total cost per attendee adds up to no more than £150 for all events added together then it is all tax-free for the employee. On the other hand, if no event taken in isolation averages more than £150 per attendee, but the total cost of all events during the year is in excess of £150, the most expensive event is deemed to be exempt, however the others will have to be reported on form P11D.

 

If you need any further information on this subject please get in touch with georgeb@tagac.co.uk or otherwise on 01995 600600.

Towers + Gornall would like to wish everyone a very happy festive season!

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