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Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166With the economic climate behaving how it is, the office Christmas party may not be as high up on the agenda as usual however there are some benefits for businesses of they meet certain criteria that means they can take advantage of tax breaks concerning parties and gifts.
Christmas Parties
HMRC allow certain benefits providing the business meets their conditions:
1. The party is a one off annual event such as a Christmas party
2. That it is available to all employees generally or if the employer has more than one location, it is available to employees generally at that one location. In the case where an employer organises its workforce at one site into separate sections or departments, an annual party may be provided separately for the different sections
3. If the employer provides one annual function for employees no charge to tax arises if the cost of the event per head does not exceed £150 (until 5 April 2003 the figure was £75 per head). This also means you can hold as many annual events as you wish providing the limit per head per year is not breached.
The figure of £150 is not an allowance. For functions that are outside the scope of the exemption directors and employees, except those in an excluded employment, are chargeable on the full cost per head, not just the excess over £150, in respect of themselves and any members of their family and household who attend as guests.
The cost of the function includes VAT and the cost of transport and/or overnight accommodation if these are provided to enable employees to attend. Divide the total cost of each function by the total number of people (including non-employees) who attend in order to arrive at the cost per head.
Christmas gifts
As an employer any gifts you given to your employees must be dealt with in the normal way for those items as HMRC tax differently for certain gifts. However, trivial benefits such as a box of chocolates or bottles of wine will normally have no reporting requirements and are exempt from tax.
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