Don’t cancel Christmas – Use your corporate entertainment tax allowance!
Several of the companies we have contacted over the last few months have been telling us that their staff parties have been cancelled or put on hold for 2009, as they ‘do not have the budget’.
Are you aware that for the many companies who are still profitable (albeit maybe slightly less so), the government allows you to claim the cost of your staff party against your tax bill?
Each and every company has a maximum annual tax allowance for staff entertainment of £150.00 inc VAT per person. Regardless of the recession, your company is still entitled to this allowance and if your company is profitable, surely it is more efficient to spend this money on motivating and entertaining your team than to simply give it away to the tax man?
If you shop around, you will find that you can book some truly remarkable Christmas and Summer parties and keep well within this budget. A Christmas party is a fantastic way to show your staff that you value them and motivates them for the year ahead. For the majority of staff this is the one night of the year that they get to let their hair down ‘on the company’. If your company is profitable and you are told ‘Christmas is cancelled’, why not go and see your finance department and ask them if they are aware of this loophole? They may not be aware that they are choosing to give an extra £150 per employee to the tax man rather than spending it on boosting the morale of their staff?