It’s reaching that time of year where you might be considering a summer barbecue or party for your staff for team building or just to say thank you for all their hard work, but don’t forget these costs are tax deductible! There are strict guidelines set forth by HMRC but if they are followed the costs can be claimed back, just remember to follow the golden rules:
- For the event to be eligible it must be company-wide, be open to all staff and meet the requirements of a structured social event. if you wish to hold separate functions for different branches, departments or other office locations this is allowable as well, as long as all staff are covered for each function.
- You will need to keep detailed records of who was invited and who attended, along with records of all the costs from all travel costs, to set up costs and the function itself.
- The cost of the event can not exceed £150 (including VAT) per attendee (including partners invited as guests). This limit can be spread across multiple events but the total event costs for the year cannot exceed the limit.
- Each event must be staff only, if any suppliers or clients are invited then HMRC would not allow the event to be claimable against profits. you will need to be careful not to disguise client entertaining as a staff event.