Will Summer Function be a Taxable Event?
Posted on 21st July 2023 by Joanne Stoneman
You would like to hold a summer event to entertain your workers and help improve morale. What is the tax and NIC position?
You would like to hold a summer event to entertain your workers and help improve morale. What is the tax and NIC position?
If you provide employees with a perk, this includes staff parties, etc., it’s a taxable benefit. But exemption can be applied if the following applies:
- the party or similar is an “annual” event
- all employees are invited (but separate events can be held for different departments on different occasions)
- the average costs (including transportation and other related expenses) of the event, or events if there’s more than one in a tax year, per head for all employees and guests attending does not exceed £150 including VAT.
If you are planning to have other events, e.g. a Christmas party, it may be that the aggregate costs exceed the £150 limit. In these circumstances, you can exempt any mix of annual events where the combined cost per head is less than £150.
The entire cost of the business entertainment event is tax deductible from your business profits.