Blog Post
It's nearly Christmas, what can I do to treat my staff and customers?
Laura Arbuckle • Dec 13, 2019
The festive season is right around the corner and everyone is gearing up for the big day so I thought it would be useful to give a quick round-up of ways in which businesses often indulge a little – and what this means from a tax perspective (bah humbug!)
Can I throw a Christmas party?
Unfortunately, entertaining your clients with a party is never an allowable expense. However, as long as you meet the criteria below, entertaining your employees is. What’s more, the employees themselves don’t have tax to pay on the benefit. In order for the party to qualify, it must be an annual event (so it doesn’t necessarily have to be Christmas) that is open to all staff and costs under £150 per head. If the cost ends up being more than £150 per head, the whole thing will become taxable. If you are VAT registered, you can also claim back any VAT suffered on your employee Christmas party so long as you invite employees only.
You do need to be a little bit mindful of the definition of employees. This means someone who is currently on your payroll and being paid a salary. It does not include shareholders, contractors or former employees.
Despite them being employees, HMRC don’t allow entertainment just for directors so if your only staff are directors, then your Christmas party event is never an allowable expense. Similarly, sole traders and partners are not employees and therefore can’t claim this type of expense for themselves.
Can I give my employees a Christmas gift?
HMRC make a provision for giving trivial benefits to your employees which you can use to purchase Christmas gifts. The gift must cost under £50, it must not be cash, not stated in the terms on the employee contract and not a reward for work or performance. If all these requirements apply, the gift is an allowable expense and isn’t a benefit in kind for the employee.
Can I send Christmas cards to my customers?
Sending a Christmas card to your clients is an allowable expense so long as the card features your logo or some other kind of advertising alongside it.
Can I give my customers a gift?
Similar to your employees, you can send your clients a small Christmas gift of a value up to £50. However, in order for a gift to someone that is not your employee to be an allowable deduction, the gift must not be food, drink, tobacco or a voucher and it must carry a visible advert for your business.
Can I buy some Christmas decorations for my workplace?
So long as you don’t work from home, even decorating your office for the festive season is an allowable expense so there’s no excuse for a drab office this year!
With the above in mind, hopefully you are clearer about what you can do, and the tax consequences of doing it. Now that we’ve sorted that out – mince pie anyone?
My name is Andrea Dow. I am originally from East Kilbride but moved to Lanark when I got married. Its semi-rural and my husband and I are very happy there. We enjoy all things outdoors – cycling, hillwalking, a bit of scrambling, snowboarding but I also love the gym too.
My residential landlord clients would probably tell you that they are fed up of hearing about HMRC’s latest requirements for reporting Capital Gains Tax. At every accounts review meeting I make sure they are fully aware that in the event they sell their residential rental property, they must complete a return and pay any tax that is likely to be due within 60 days of the sale being agreed.
How you structure your business is really a personal preference. Find out more about why you may want to operate through a company and how you move your sole trade business into a company easily.
After moving his sole trade business to a limited company, William struggled to connect with his then bookkeeper and became late submitting his tax returns. Keep reading to find out how we managed to get his late tax returns submitted and get the company back on track.
We’ve all seen the adverts from the big players in the bookkeeping arena recently. QuickBooks and Xero are going to do all your business record keeping for you. What they don’t tell you is that even with the help of software, it still needs your input to ensure you get the right answers.
If you are juggling your work-life balance, we can help you to find more time for yourself by helping you with your self-assessment return. You may be wondering how that might work in practice. I can’t speak for every accountant or payroll operator but in this blog post I describe how the process works at Armet Accounting.
When you ask someone else to produce your company accounts and tax return for you, you may wonder how that might work in practice. In this blog post I describe how the process works at Armet Accounting.
We all know that at the start of the year we should be setting goals and they should be “SMART”, that is Specific, Measurable, Achievable, Realistic and Timebound (or even SMARTER if you are going to Evaluate and Review them). What happens if our goals don't drive the right decisions?
If you’ve never been a business owner before, it can be a daunting prospect to set up on your own. It can be hard to know where to start. It’s actually not hard to set up a business, but there are a few things that you need to consider in order to get your business up and running.
Urusla Hogan keeps on top of all the client data. With many years of bookkeeping experience, she knows how to ensure your business transactions are recorded properly!