Employers could scupper the season of goodwill by leaving their staff exposed to a tax charge after their Christmas party, accountants have warned.
Employees may be liable for a tax charge if their bosses spend more than £150 per head during the year on entertaining staff, tax rules state. The £150 allowance had not changed since June 2003, said tax partner Andy Sanford, of Blick Rothenberg. He said that firms should monitor expenditure or face affecting morale. Entertainment of staff is considered by HM Revenue and Customs (HMRC) as a benefit in kind which is taxable. So after the £150 allowance, a tax bill could be levied on individual employees. However, firms could enter a settlement agreement that would ensure employers covered the cost, rather than employees.....Read more here