IT may not come as a surprise to many workers that their bosses are grumpy about paying for a Christmas party.
But, there is no need for any bah humbug, given that bosses can spend up to £150 per employee for a great Christmas night out — and reclaim it all back from the tax authorities.
So it might be time for employees to remind those stingy bosses that it is the season of goodwill.
The rules are very clear and bosses need to report and pay depends on:
(1) If it’s an annual event
(2) If it’s open to all employees
(3) If it costs more than £150 per head
(4) How many event an employer provides during the tax year
(5) Whether the employee is a director and how much they earn
What’s exempt
You might not want to report anything to HM Revenue and Customs of pay tax and National Insurance. However, to be exempt, the party or similar function must be all of the following:
(1) Cost £150 or less.
(2) Annual, such as Christmas party or summer barbecue.
(3) Open to all employees.
Multiple annual events costing less that £150 per head combined:
As long as the combines cost of the events is no more than £150 per head, they are still exempt.
Multiple or more annual events costing £150 per head combined:
If any of the events cost less than £150 per head, bosses may be able to count these costs as exempt. But they can’t do this if they have already used up the £150 exemption on another event.
For further guidance employers can visit gov.uk
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