Christmas is only a few weeks away and we know you’ve probably planned parties and gifts to thank everyone for their hard work and loyalty over the past year. Our bookkeeping teams are busy sharing HMRC’s guidance about Christmas giving with our clients so here are the key points, written into this Christmas giving blog.

Office Christmas Parties

Are you holding a Christmas party or festive celebration for your team? Were you aware that there are rules about how much you can spend on a party?

Firstly, you must invite all your employees to the party to be eligible for the HMRC party allowance of £150 inclusive of VAT per employee. This amount must cover all entertainment, food and drink, accommodation and transport. If the cost of qualifying parties goes over £150 per head then the whole cost (not just the bit above £150 per head) is taxable on the employee as a benefit in kind. 

You can invite clients to your Christmas party but… You can’t claim client entertainment as a business expense so the party needs to be clearly billed as a staff event and the focus needs to be on your team, not your clients.

Christmas Gifts for your staff

If you’re a limited company, you can treat yourself and your staff to a ‘trivial’ gift such as a bottle of wine, vouchers or a box of chocolates. It cannot be cash and can’t be valued at more than £50. Delivery charges count towards the limit.

If the gift is worth more than £50, it should be declared to HMRC via a P11D. 

How you can give your team a gift at Christmas

If you really want to acknowledge your staff at Christmas, here are a few ideas that will not attract national insurance or tax payments.

• Give everyone a day or half-day for Christmas shopping
• Offer flexible working so that families can attend festive events, such as a school or nursery nativity or  carol concert
• Put on a team-building experience

Christmas cards and gifts for clients

Sending Christmas cards to your clients can be fantastic marketing as you thank them for working with you over the past year. Both the card and postage can be recorded as a tax-deductible expense, as can any charitable donations made to a registered local charity in lieu of sending a card.   

If you want to give a tax deductible Christmas gift to your clients, it must be conspicuously branded with your logo or include a clear advertisement. In addition, it must be worth less than £50 in value and cannot be food, drink, tobacco or vouchers.

How the flexible Hour Hands EA team can support your business

If you’re unsure if your Christmas plans need to be reported to HMRC, then give us a call. The Hour Hands team of talented bookkeepers can guide you in the right direction.  They can also help you at this very busy time of year to complete those urgent and important tasks that you just don’t have the time to complete but really need doing before the festive break. By outsourcing these tasks, you can flex when you need support – and we will deliver ongoing support or for a one-off project or resolving a particular task. 

To find out more simply visit our website or call us on 01727 818262. We will ask how we can support you and offer a solution either on an hourly rate or package cost. The choice is yours – we simply want to help.