It is fairly well known that employers can spend up to £150 per person per year on staff events (typically meals out, Christmas parties, etc.) without having to worry about income tax being charged to the staff members. This figure is cumulative so that the cost of all events during the year have to be added up and the cost of the one which takes the total over the £150 is taxable, as well as any subsequent ones before the end of the year. This rule can cause problems for generous employers.
There is another fairly new rule which will help to avoid this issue. HMRC recognises that some benefits provided to staff are ‘trivial’ and therefore also exempt. The cost of each individual benefit must not exceed £50, and the total in the year must not exceed £300 per person. Such items can include gifts and tickets to events (as long as not exchangeable for cash) and if they fall within this provision they will not count towards the £150 total.
If you would like to discuss your position in more detail, please contact one of our team today.