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Should Office Parties Get A Tax Break | Business Tax Advice | Tax Savings for Business
Should office parties get a tax break? 758 513 Stepping Stones Accountancy

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:

  1. Companies can use this increase to offer thanks to their employees without having to worry about tax implications through the benefit-in-kind restrictions.
  2. Rather than a bonus scheme, a business can thank all its employees as a united team, rewarding everybody in the same way.
  3. 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.
  4. 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.

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