Christmas wouldn't be Christmas without the office "do", but
Shropshire's small businesses need to stick to the rules, a local
tax expert has warned.
Nigel Lomax who runs TaxAssist Accountants in Shrewsbury said:
"Local businesses across Shropshire are busy planning their
Christmas parties, but as well as deciding on the venue, the food
and the fizz, employers also need to consider the tax consequences.
Otherwise, the office bash could end up costing the very people
they are there to reward."
Employers could pay up to £150 per head per tax year for a
Christmas party or similar annual get-together, said Nigel Lomax
without incurring any tax liability for the employee. Any more than
that and employees would face a benefit in kind charge for the full
amount, not just the amount over £150.
Seasonal gifts for employees, such as an ordinary bottle of wine
or box of chocolates, can be treated as "trivial benefits" so not
subject to benefit in kind, but if the gift extends to a case of
wine or Christmas hamper, for example, the contents and cost might
be considered above that "trivial" threshold and again, employees
could be taxed on the full amount.
Nigel added: "Business owners can enter into a Pay As You Earn
Settlement Agreement with the Revenue to avoid staff incurring a
benefit in kind charge and the employer settles their tax and
National Insurance instead. The key is to keep within the limits
and keep accurate records and receipts. That way, at least one
Christmas party headache can be avoided."
TaxAssist Accountants Shrewsbury is a local business itself,
providing tax and accountancy advice and services to more than 400
small businesses.