Now is usually the time that Christmas Parties would be booked, you’d be looking over the menu to pick what you’ll be having, sorting out your outfits and counting down the days to the Office Party. The 2020 festive season will by unlike any other. Whilst a lot of us are hopeful, traditional office parties may not be an option this year… so you may already be thinking about boosting morale with a virtual event.
Now we want to make sure whilst it might not the party of choice, that we’re able to take part in a Virtual event without causing a tax headache.
On Friday (20 November) HMRC have confirmed that UK employers can take advantage of the £150 annual party tax free amount. Remember that this exemption includes all costs and must include VAT.
So let’s remember the rules of how we’re eligible for the annual exemption:
- Open to all employees
- Total cost of everything falls under £150 per attendee (remember
- We would suggest something that mirrors a traditional party = food, drink and entertainment is more likely to apply
- Remember this includes the cost of everything, so VAT, the party poppers, the entertainment, the food.
Instead of a tax headache if you follow the above, it may just be a logistics headache of ensuring everyone can eat, drink and be merry at the same time.
Are gifts taxing too?
There is an exemption, where if you provide an employee with a gift up to the value of £50 including VAT, then this is tax free. Anything over this, and it will need to be included on a P11d or mopped up by the employer in a PAYE Settlement Arrangement. Give our Bev a shout if you’d like to talk about this more!
This must just not be cash, so a gift voucher, a bottle, or a turkey will work nicely. But remember if you provide a bottle of fix, the gift bag needs to be in with the value of the gift too when adding up to that £50 figure.
Can I do both?
Yes! It’s not a one or the other, you can do both.