Christmas Party Time!

There continues to be no taxable benefit for employees provided that all staff are invited, and the cost to the employer does not exceed £150 a head, inclusive of VAT.

 If you have already had a summer event, provided the combined cost of the two events is no more than £150 a head, there would be no taxable benefit in kind. If, however, the summer event cost £80 a head and the Christmas party £100 a head, only one event would qualify for the exemption and the employees would be taxed on the £80 benefit. Alternatively, the employer could deal with the tax and NIC on behalf of the employees by entering into a PAYE settlement agreement (PSA) with HMRC.

The conditions for benefits to be included in a PSA are that they must be:

(a) minor, as regards the amount of the sums paid or the type of benefit provided or made available;

(b) irregular, as regards the frequency in which, or the times at which, the sums are paid or the benefit is provided or made available;

(c) paid in circumstances where deduction of tax by reference to the tax tables is impracticable; or

(d) in the case of a benefit provided or made available, shared between employees so that apportionment of the benefit between the employees is impracticable.