Christmas wouldn’t be Christmas without the tax man!

Christmas wouldn’t be Christmas without the office “do”, but small businesses in Llanelli need to stick to the rules, a local tax expert has warned.

Roger Bowen who runs TaxAssist Accountants in Llanelli said: “Local businesses across Llanelli are busy planning their Christmas parties, but as well as deciding on the venue, the food and the fizz, employers also need to consider the tax consequences. Otherwise, the office bash could end up costing the very people they are there to reward.”

Employers could pay up to £150 per head per tax year for a Christmas party or similar annual get-together, said Roger, without incurring any tax liability for the employee. Any more than that and employees would face a benefit in kind charge for the full amount, not just the amount over £150.

Seasonal gifts for employees, such as an ordinary bottle of wine or box of chocolates, can be treated as “trivial benefits” so not subject to benefit in kind, but if the gift extends to a case of wine or Christmas hamper, for example, the contents and cost might be considered above that “trivial” threshold and again, employees could be taxed on the full amount.

Roger Bowen adds: “Business owners can enter into a Pay As You Earn Settlement Agreement with the Revenue to avoid staff incurring a benefit in kind charge and the employer settles their tax and National Insurance instead. The key is to keep within the limits and keep accurate records and receipts. That way, at least one Christmas party headache can be avoided.”