So Here It Is, Merry Christmas…

Everybody's having fun - unless you are booking your Christmas staff event and get the sums wrong! Below is a reminder of HMRC's tax rules which apply to events that cost over £150 per attendee.

As the mince pies and decorations appear in the shops, I make no apology for recycling a reminder of the tax traps which arise from work Christmas parties.

HMRC's rules mean that the benefit of an “annual event” costing less than £150 per attendee is not taxed on the employees. If it costs more than £150 per attendee, the entire cost is a taxable benefit. 

The majority of caring employers normally pick up the tax and National Insurance which would otherwise be payable by the employees through an annual PAYE Settlement with HMRC. So if the event costs £151 per head, the tax and NIC for a 40% taxpayer goes from zero to £139 so the cost to the company is almost doubled.