1. We would like to take our staff out for a Christmas lunch. How much can I spend without incurring any tax problems?
With Christmas fast approaching (to the dismay of many!), here’s a reminder of the tax treatment of benefits and gifts to staff over the festive period:-
• A tax exemption is available for expenditure of up to £150 inclusive of VAT for each member of staff. Any more than this and the entire amount is treated as a taxable benefit on the employee.
• Christmas gifts of cash or vouchers will always be taxable on the employee. However HMRC will not seek to tax a seasonal gift generally up to the value of £50 per member of staff.\
Remember this £150 tax exemption applies to “annual parties” so if a Christmas party isn’t possible, the same rules would apply to say a summer BBQ or staff outing.
2. One of my employees has mentioned that his pay should have been increased from the 1st October. Is this correct?
Your employee is correct in the fact that the National Minimum Wages has increased as of 1st October 2014. The main rate for 21yrs and over is £6.50 whilst 18-20’s is £5.13, under 18’s is £3.79 and there are different rates for apprentices.