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Tax Tip

Don't give the taxman a Christmas bonus 28 November 2011

We asked our resident Tax Guru, Stuart Coleman, about Christmas and the forthcoming party season.

“If you are holding a staff Christmas party this year, be careful to avoid a tax bill. If you plan your spending carefully, you will be able to enjoy your Christmas party to the full.
Providing the cost does not exceed £150 per head, there is no tax or NIC to pay. This rule applies to any one annual event that is open to all employees, whenever in the year it is held. If the cost of a single event exceeds £150 per head, the whole amount is taxable and liable to NIC. “

The totals to use in this calculation are inclusive of VAT and all associated travelling and accommodation costs should be taken into account. The cost per head is calculated on the number of people attending the event, including spouses or partners if applicable, rather than the number invited.
 
So if you want to avoid giving the taxman an unexpected Christmas bonus, do your sums before you book, or call Stuart at ABDS.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net
 

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