Our Tax Tip number four is staff entertaining. Did you know staff entertaining is eligible for tax-relief? Watch our video to find out more.
Now it’s worth noting that client entertaining is not eligible for tax relief and you can’t claim VAT on it either. However, staff entertaining is eligible for tax relief.
Now, how much can you spend on each staff member? You could spend up to £150 per head on staff entertaining and claim the tax and VAT back.
And that £150 can include extras like taxis to and from the venue, or a hotel bill after the event.
This is an annual limit and it doesn’t have to be spent in one go.
However, each event is assessed individually and if an event goes over the £150 limit, that event is no longer eligible.
As an example, if you have one event worth £150, you get tax relief. If you have one event in the year worth £151, the whole event is not eligible for tax relief. It’s all or nothing.
If you do more than one event and, for example, the first two events cost £70 each, they’re each eligible and use £140 of the limit. If the third event costs more than £10, none of the cost of the third event is eligible. The first two are still okay.
Are there any other conditions?
The other condition to be aware of is that, for these events to be eligible for tax relief, everybody needs to be invited.
Or, at least everybody needs to be invited in sensible groups. So if you’re split across different offices or different departments, it could be an event for each office or department.
But you can’t just pick and choose your favourites! It has to be all or nothing.
Now it’s worth noting as well if you are a sole trader or the only owner of a limited company, you can still reward yourself with a Christmas meal. And, because it’s £150 per person, you could take your other half and get and use up to £300.
If you would like any more information, please feel free to get in touch.