The holidays are here again! If you are looking for the best way to reward your employees for the hard work put in over the year and also avoid excesses, then you are at the right place.

2018-12-18 Christmas tax write offs - UK

Celebrating and rewarding all employees at the end of every year ensures better productivity and output in the new year and coming years. While this is important, it is also vital to know your spending limits, to avoid starting the new year with debts or a budget deficit. 

Celebrations for employees are in the form of parties or get-togethers. Now, with regards to the law, there are some fixed rules as baselines for celebrations in businesses. There is a level to which the spending would begin to attract taxes on it which in itself means extra expenses, so the management of every company wants to do their best to avoid taxes on such spending. 

Important things to note before an event can be exempted from tax, therefore, depend on:

- Total number of such event provided throughout the whole year,
- If all employees have access to such events,
- The amount spent on the event,

For an event to be exempted from tax, the amount of money spent must be £150 or less per head for as many people that attend the event. Any expense above this would incur the payment of tax by the company.

If organised events are annual events such that it occurs just once in the whole work year, it is applicable to be exempted from tax payments. However, in cases of more than one event in the year, tax offs are only applicable if the sum of the cost spent on all the events is still less than or equal to £150 in total. 

Events open to all employees of the business irrespective of their ranking are also considered as exempts. As long as all your employees attend the event, business owners do not require to pay tax on such events. 

In cases of events with multiple and different locations or sites, the exempt is still applicable for each site separately as far as all employees attend the event in their based location. 

For instance, company Z is a thriving business with three different branches and a head office all located at separate places in the country. Mr Z being the owner wants to have an end of the year get together with the employees, but there is no way of getting all employees from the four locations to a single place at the same time. So, he decides to have the party for each branch at their various venues, all employees are invited to attend, which they all did, and they were all attended to with a total of £135 per individual. 

In this scenario pictured above, there would be no charges of tax on company Z whatsoever since Mr Z followed all of the precise rules. He, therefore, gets to enjoy the season with all his employees and at the same time spend within a reasonable budget for his company.

In summary, as much as it is essential to enjoy the Christmas holiday alongside your employees, ensure that you stay out of money and law trouble while doing so. Enjoy a great holiday!

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