Somehow, December has snuck up on us again, Christmas is fast approaching. Presents have been bought, trees decorated, mince pies stocked up, and the anticipation for the Christmas party is building.
Christmas is a time of giving, so what can you give back to your staff without suffering for in tax? There are a few different allowances and exemptions which your small business can take advantage of at Christmas time. Yes that’s right, even the tax man is embracing the Christmas spirit!
The Christmas Party allowance
Did you know that your staff Christmas party qualifies as a tax-free benefit? Whether it’s a sit-down meal, a team building activity or one too many drinks around the office photocopier, as long as it meets these 3 criteria, you can save tax:
1. There is a cumulative spend of less than £150 (including VAT) per head
2. It is an annual event
3. It is open to all your employees
If the idea of performing your best rendition of Last Christmas with your employees and a bottle of bubbly isn’t for you, don’t fear! The £150 allowance can also include a Christmas present.
At the risk of sounding like Scrooge, here at Atkinson Accounts we would advise you are careful to keep a track of how much you are spending. Even the price of a mulled wine over the £150 spend will require you to pay Employer’s National Insurance.
The Christmas present allowance
There is another allowance called Trivial Benefits. These are those benefits that don’t cost you very much to provide. They can be small gifts to your employees that must cost under £50. As long as the gift is not cash, performance related or established in their contract you can try playing Santa! On any trivial benefits you will not be required to pay tax or National Insurance; the tax man doesn’t even need to know!
Here at Atkinson Accounts we hope we have saved you the trouble of working through the confusing tax rules to see what is allowable. So, you can gift your employees without to pay additional tax and National Insurance.
Although we have done our best to minimise the headache of working this out, we can’t promise anything about the headache after your Christmas party!
For more information or to ask any specific queries please call the office on 01244 31 6449. Alternatively, email enquires@atkinsonaccounts.co.uk.
