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Are my Christmas gifts and Christmas party tax deductible?

It's getting closer..... I can almost sniff the mulled wine and mince pies being made for the Christmas markets.

So it feels like a good time for a reminder about what is tax deductible in your business for Christmas events.

1) Staff Parties - Costs for staff parties are allowed up to £150 per person over the year. So if you have a summer bbq that costs you £50 per head, a halloween pizza party and £10 per head and a Christmas party at £70 per head then you are under the £150 per person.

2) Staff Gifts - this falls under trivial benefits:

Benefits costing less than £50 are not subject to tax provided all of the following conditions are met.

A — the benefit is not cash or a cash voucher and

B — The cost of providing the benefit does not exceed £50 and

C — the benefit is not provided pursuant to relevant salary sacrifice arrangements or other contractual obligations and

D — the benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services and

You need to consider whether or not a benefit has been provided on more than one occasion during the course of the tax year. If so, the total cost will be sum of all costs incurred by the employer for all occasions. If the total cost is greater £50 then the entire cost of the benefit is subject to tax.

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