The CleverHub

A central source of accountancy related news, arcticles and reviews

Call 0113 518 8800 Call me back

Christmas – Tax Benefits and Expenses

by | Nov 30, 2018 | Running a business

With Christmas just around the corner, it is worth considering what expenses you can claim through your limited company.

As a director of a limited company, you are exempt from paying tax and national insurance on a party or similar social event, as long as it fits the following criteria:

  • Spend less than £150 per person
  • An annual exemption against a Christmas party, or a summer barbecue
  • It is open to all employees

More than one festive event

You can have more than one event during the course of the year but the combined cost must not exceed more than £150 per head. So you could have two events, each costing £75 each per person and both would be exempt from tax and NI. However, if the event(s) total more than £150 per person, you will not qualify for the exemption. For example, if you spend £200 per person, you are not allowed to offset £150 against the total spend. Instead you would be taxed fully on the£200 so keep track on what it is costing you.

Invite your partner or spouse

If the prospect of eating alone do not fill you with festive cheer, do not despair. You can also claim the exemption against any spouses/partners that attend as guests. This would mean you could qualify for £300 of tax free partying!

What to include

It is important to ensure that you include the VAT, cost of transport and/or overnight accommodation if these are provided within your £150 exemption per person. You also need to actually spend the money, you cannot withdraw £150 in cash or the exemption will be lost.

Christmas Gifts

You are able to give a business gift worth up to £50 to any one person in any one tax year. However, the gift must be a business gift which could be a business diary for example, as it must carry an advertisement for your company.

Food, alcohol, tobacco or vouchers which can be exchanged for food, drink or tobacco are not permitted as gifts.

If the gift costs more than £50, then HMRC disallow the full amount and not just the element over the £50.

IR35 - read more about it

Find out what changes are coming, how this could affect you and what we can do to help.

COVID-19

Information for contractors, freelancers and limited company on what help is out there

Our accounting packages

Limited Company

Used by thousands of limited companies and contractors, you get unlimited accounting support and advice, easy-to-use online accounting software all for a single fixed monthly fee. This package also includes our Flex solution to allow seamless switching between a limited company and Umbrella plus free insurance*

Growing Company

Our fully bespoke accounting service for limited companies that are growing or in need of additional services. This package includes a dedicated bookkeeper and payroll solutions for multiple employees together with fully pro-active support and advice and face-to-face meetings via video conferencing.  If you need that extra hands-on service, this is perfect for you.

Need an accountant?

Clever Accounts offers fixed-fee online accountancy support for contractors, freelancers and limited companies.

Dedicated accountants, online accounting software and 15 years expertise in the market makes us the perfect choice.

Find out more Request a call back

Z

Designed for contractors & limited companies

Z

Your own dedicated, experienced accountant

Z

Monthly fixed-fees - no surprise bills

Z

End-to-end IR35 support and guidance

Z

Year end accounts, payroll and VAT