Should office parties get a tax break?
As the festive season is fast approaching many companies have finalised their plans for a little fun and laughter choosing to bring back the traditional office party. The key question many are asking is, can they get a tax break?
It appears that the simple reason for asking is that companies want to further encourage staff members to return to the office and funding a Christmas party is seen as a positive step towards that. It will also further boost the hospitality sector, who have been one of the most heavily impacted industries by COVID-19.
Requests are being made of the Government to aid in this by relaxing some of the rules around Christmas parties (or similar events). It is also believed that there is a growing interest for the Government to increase the “tax-free” allowance per employee from £150 per person to £300 per person.
Key reasons for proposing the increase are:
- Companies can use this increase to offer thanks to their employees without having to worry about tax implications through the benefit-in-kind restrictions.
- Rather than a bonus scheme, a business can thank all its employees as a united team, rewarding everybody in the same way.
- As previously mentioned, it boosts the desire to encourage more people to start working back in the office which also results in more activity in town centres and urban areas.
- Finally, it gives confidence to people who might previously have been reluctant to get back to working in an office.
As a reminder, and as it currently stands, the tax-free allowance applies to any event in a calendar tax year. It is possible to hold more than 1 event but the total cost cannot be any more than £150 per head (with the hope of this increasing to £300 per head).
If you have any questions around tax and benefit-in-kind, please call us on 01173 700 079 or email hello@steppingstonesaccountancy.co.uk.