xmas party CUK article incorrect? xmas party CUK article incorrect? - Page 2
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  1. #11

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    HMRC guidance and some examples here but not much use looking at it.

    https://www.gov.uk/hmrc-internal-man...anual/eim21690
    Last edited by northernladuk; 6th December 2017 at 11:49.
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  2. #12

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    Funnily both articles are written by:

    Sumit Agarwal of DNS Associates.....
    Last edited by MrButton; 6th December 2017 at 11:49.

  3. #13

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    The actual legislation makes light reference to attendees who aren't employees, and doesn't say they can't have their own £150 allowance - therefore resulting, I think, in the accountants assumption that they can.

    Income Tax (Earnings and Pensions) Act 2003 (note the £75 figure shown was amended in later legislation to £150)

    So I'd say it's £150 per head. Although I don't think you're really saving money at all if you go out looking for restaurants where you can pay that much

  4. #14

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    Quote Originally Posted by PerfectStorm View Post
    So I'd say it's £150 per head. Although I don't think you're really saving money at all if you go out looking for restaurants where you can pay that much
    This is the bottom line of it all really.
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  5. #15

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    If you do a search on here this has been discussed many times. Non-employees aren't explicitly excluded from an annual event but they are counted when working out the cost per head. The main rules are:

    * It's an annual event
    * It's primary purpose is to entertain your employees and it must be open to all employees. For a large company, this means they could potentially invite non-employees so long as its still primarily for staff. For a one man company, in practice this means you could invite a your spouse/partner as a guest but nobody else really. There's no definitive guideline here - apply a common sense definition of what "primarily for employees" means. Also, if you invite clients this may be excluded as client entertaining.
    * The total cost per head of *all* guests must not exceed £150 per head.
    * If the event is not exempt (because it doesn't meet the above rules), then a BIK is chargeable on an employee (or director) for both the costs of their own attendance, plus the attendance of any member of their household or family members.

    Overview here:
    https://www.gov.uk/expenses-benefits...s/whats-exempt

    Technical guidance:
    https://www.gov.uk/hmrc-internal-man...anual/eim21690

    I can't find anything to back up the claim that you are explicitly limited to one guest, other than the general rule that it must be primarily a function for employees - HMRC would likely consider a single director taking more than one guest would fail this test IMO. If you and your spouse are both directors, then you could potentially both take a guest. I don't think HMRC are likely to query this so don't overthink it - if you're taking 20 mates out on a piss up on the company books, then that's a different story.
    Last edited by TheCyclingProgrammer; 6th December 2017 at 12:49.

  6. #16

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    I read the article, and yes the interpretation of the cost per head rule and the accompanying examples are incorrect. The cost of a spouse does not come out of the employee's £150 limit. If there are two guests, then the meal can cost up to £300 inc. VAT.

    From HMRC's technical guidance:

    The cost of the function includes VAT and the cost of transport and/or overnight accommodation if these are provided to enable employees to attend. Divide the total cost of each function by the total number of people (including non-employees) who attend in order to arrive at the cost per head.

  7. #17

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    Quote Originally Posted by sketchandsunshine View Post
    The article in question is from 2012 though.

    No idea if this has changed since and the article hasn't been updated.
    The rules haven't changed.

  8. #18

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    In our case our annual event is a Motorsports event in the summer. Both my wife and I are directors so budget is max £300. Our two boys always come so in theory could we count them as guests (one per director) and so increase the allowable budget to £600?

  9. #19

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    Quote Originally Posted by SouthernHarrier View Post
    In our case our annual event is a Motorsports event in the summer. Both my wife and I are directors so budget is max £300. Our two boys always come so in theory could we count them as guests (one per director) and so increase the allowable budget to £600?
    Yes.

    Edit: or more precisely, yes the total cost per head would mean max £600 for 4 people, obviously, but there's no guarantee HMRC would consider a family day out to a motorsports event in the middle of Summer a company annual event. Do you do this on an annual recurring basis?
    Last edited by TheCyclingProgrammer; 6th December 2017 at 13:11.

  10. #20

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    Quote Originally Posted by SouthernHarrier View Post
    In our case our annual event is a Motorsports event in the summer. Both my wife and I are directors so budget is max £300. Our two boys always come so in theory could we count them as guests (one per director) and so increase the allowable budget to £600?
    Will they be laying on a conference room?

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