We wish all of our readers a merry Christmas, a happy and healthy New Year and hope you enjoy our cheesy Christmas cracker jokes! Whether buying gifts, throwing Christmas parties or rewarding staff, we thought it a good time to remind you of the tax position of some of the different areas, writes Holly Mitchell, Associate at Carpenter Box.
Most business celebrate the holidays with a well-earned Christmas party for their staff.
Staff parties are an allowable cost for tax purposes for the business. That means no taxable benefit will arise on employees (so long as the total cost per head of this, combined with any other annual events, does not exceed £150).
Staff Christmas gifts
Another common way to celebrate is with gifts to share with your team. Non-contractual and unpromoted gifts to your staff members can be provided tax-free, where:
- the value does not exceed £50 per person per annum
- is not provided as cash or a cash-voucher
- unfortunately, is not a gift of wine, alcohol, food, drink, tobacco
For example, a one-off voucher up to £50 from your vineyard for a wine tour would be ok but most frustratingly a bottle of your wine gifted at Christmas would not!
Christmas gifts to customers
Whilst certain gifts to staff members and staff parties are an allowable deduction for the employer, gifts and entertaining of customers and suppliers are not tax deductible for the business.
However, there are circumstances where gifting your own branded bottle of wine to a customer or supplier can be accepted as advertisement for the business, as opposed to entertaining.
There are certain rules around the allowability of such promotional gifts for tax purposes, which should be considered on a case by case basis and discussed with your accountant.
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Because they were two deer!
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He missed the deadline on his elf-assessment