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Chartered AccountantsChristmas gifts for clients and staff by Harris & Co accountants Northampton.
Before indulging in mince pies and the odd drink or two, accountancy firms are being urged to remind clients of ways to make corporate present-giving more tax efficient during the Christmas season, and to be wary of making expensive slip-ups by overdoing the entertaining.
Tax rules allow a tax exemption for employee entertaining where the cost of a corporate party does not exceed £150 per head, for all attendees including clients and guests of employees (including VAT).
If a party excess does result in an overspend of the £150 limit, then the amount exceeded must be reported as a benefit on the employee"s P11D, or the employer can opt to pay the tax as a PAYE settlement agreement (PSA).
However, if a business spends as little as one penny over the £150 limit, which includes VAT, the full amount spent will become liable to income tax and National Insurance for both staff and employer alike
Tax rules allow a tax exemption for employee entertaining where the cost of a corporate party does not exceed £150 per head, for all attendees including clients and guests of employees (including VAT).
If a party excess does result in an overspend of the £150 limit, then the amount exceeded must be reported as a benefit on the employee"s P11D, or the employer can opt to pay the tax as a PAYE settlement agreement (PSA).
However, if a business spends as little as one penny over the £150 limit, which includes VAT, the full amount spent will become liable to income tax and National Insurance for both staff and employer alike
