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Tax
Hints & Tips

Lymm Village

Tax Hints and Tips

Lymm Village

Free hints and tips about tax and accountancy from Lymm Tax

Gifts and parties

Christmas parties

Staff entertaining is a deductible business expense as keeping you staff happy usually qualifies as a valid expense which benefits the business.

However “excessive” staff entertaining is a benefit in kind taxable on the employee in the same way as say a company car or private medical insurance. If your employee gets a tax bill as a result of going to the staff Christmas party any goodwill the employee feels towards the employer will soon disappear.

“Excessive” means more than £150 per head. So take your employees out for a slap up meal courtesy of George Osborne and celebrate in style. Alternatively be a bit more frugal and spend £75 per head at Christmas but do it again in summer: provided the total cost does not exceed £150 per year the limit can be allocated between several functions.

Gifts to customers

These will not be an allowable expense for business tax purposes unless:
The gift is worth less than £50 per customer;
It displays your businesses name;
It is not food, drink or tobacco.

Gifts to employees

These are an allowable business expense and are not taxable on the employee provided they are “trivial” in value terms to the employee. Trivial is not defined but a turkey, box of chocolates, bottle of wine etc would satisfy this criteria.