Did you know that an employer may spend up to £150 per head (inclusive of VAT) per year, in providing annual functions and events to entertain its staff?
There is an exemption from tax, National Insurance and reporting if you provide a party or similar function for employees as long as it meets the following three conditions:
- £150 or less per head
- annual, such as a summer barbecue or Christmas party
- open to all your employees
As long as the £150 per head limit is not exceeded, multiple events can be held throughout the year.
If any of the events cost less than £150 per head, you may be able to count these costs as exempt.
However, you can’t do this if you’ve already used up the £150 exemption on another event.
“If say, there were three annual functions of £70 each per employee, the taxation would cover two of them and the employee would be taxed on the third event,” said Peter Way-Rider, tax manager at Ellis & Co.
For further information about non-taxable payments or benefits, or any other tax matter contact Peter Way-Rider on 01244 343504.