We would welcome the opportunity to assist you with any planning and compliance matters so please do contact us.Many of us will miss the company snack bar now that many offices are closing. setting up and submitting a PSA for non-exempt benefits.non-cash benefits to assist employees with their cost of living.planning flexible and tax efficient remuneration packages for key employees within your organisation.reviewing existing employees’ remuneration packages for tax and NIC efficiency.Ensuring that you comply with all the administrative obligations and plan to minimise tax liabilities is essential. The taxation of employment benefits is a complex area. You can also put on separate parties for different departments if all of the employees can attend at least one of them. If the business has more than one location, an annual event that’s open to all staff based at one location is still ‘open to all’. The total cost is then divided by the total number of attendees, including any non-employees. It will also include any overnight accommodation and transport costs provided, and the amount must include VAT. The cost per head is reached by considering every cost that goes into the event such as the venue, food and drinks. Where this is the case, only one event will be eligible for the exemption, and the other will need to be reported through a PSA (the cheaper event obviously!). However, the cost per head of both events combined must not be over £150. This exemption can be spread over different events, such as a summer BBQ and a Christmas party. However, HMRC have an annual events exemption, which if the annual event falls under certain conditions, is exempt from tax arising from the benefit provided. Where the director’s or other office holder’s family or household member is also an employee of the company, they will also be subject to a £300 cap.Ĭhristmas Parties (and other annual events)Īs with gifts, the provision of a staff Christmas party would generally be considered as staff entertainment, and therefore a taxable benefit. Where the benefit is provided to a member of the employee’s family or household who is not an employee of the employer, this benefit will count towards the £300 exempt amount. There are additional rules for directors and other office holders of close companies, who will be subject to an annual cap of £300. However, these would need to be included in a PAYE Settlement Agreement (PSA), where you, as the employer, would pay the tax due on the benefit, on a grossed-up basis, on the employee’s behalf. Where you wish to provide any gifts above £50 in value, this can still be done without a taxable benefit arising for the employee. HMRC can argue that this expectation means that the trivial benefit exemption will not apply. They cannot apply to any thank you gifts, as these would be classed as a reward for service.Ĭare also needs to be taken, as HMRC can challenge anything provided regularly under the trivial benefit exemption, as it might create a ‘legitimate expectation’. This could apply to Easter eggs, wedding, and new baby presents, etc. The trivial benefits exemption can apply to any other gifts provided to employees throughout the year where the conditions are met. How regularly can we use a trivial benefit?
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