Carmarthen | Haverfordwest | Lampeter
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LHP
Chartered Accountants

Annual staff party can qualify as a tax free benefit

Staff parties: at a glance

 

A staff party or an annual function qualfies as a tax-free benefit for your employees providing that you meet the following conditions:

 

  • The total cost must not exceed £150 per head, per year.
  • £150 includes VAT together with any extra costs such as transport and accommodation.
  • The £150 is a limit and not an allowance: if the cost is £151, the whole benefit is taxable.
  • The event must be primarily for entertaining staff.
  • The event must be open to all staff (in that location, if you have several branches or departments).
  • The event is not just to be for directors, unless all your staff are directors.
  • The cost of the whole event is an allowable expense for your business.
  • You can claim back input VAT but this may be restricted where you are also entertaining customers.

 

 

Source: https://www.rossmartin.co.uk/employers/benefits-shares/81-parties-and-annual-functions#at-a-glance

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