As the nights get longer and darker, and the end of the year draws ever nearer, this is the perfect time to treat yourselves and your staff to a much-needed morale boost! We have compiled a handy list of tips to maximise festive spending for your business.

This post is designed for business owners, but you can find our tips for individual finance here.

HMRC recognise that people might need some help in finding their Christmas spirit after a long year of hard work, so they allow Christmas parties (or another specific “annual event”) to be exempt from tax and National Insurance! This is provided that the following apply:

1. The Christmas party must not cost more than £150 per person

2. The party must be open to all employees

3. The exemption can apply to an employee and a single plus-one per employee, provided that plus-one is a family member or partner

It’s good to bear in mind that if you have a party for directors and employees, then you can also reclaim VAT on the event expenses. This is also famously a good way to promote team bonding, just be sure not to overdo it on the wines if you all have to work the next morning!

In addition to a tax-deductible annual event, you’re also allowed to provide “trivial benefits” to employees that you don’t need to declare to HMRC. The rules for these are as follows:

1. The value of the “trivial benefit” must not exceed £50

2. The trivial benefit cannot be cash. Other gifts are acceptable, such as wine or gift vouchers or tickets, as long as they cannot be exchanged for cash. With this in mind, keep the receipt out of the bag when you hand over the gift!

3. The trivial benefit cannot be used to make up an employee’s salary, or reward them specifically for work they’ve done

This kind of benefit is a lovely way to show your employees how much you’ve appreciated the effort they’ve put in over the year, and can show a great personal touch if you find the right gift!

To further incentivise good deeds amongst your festive spending for your business, HMRC also allows you to pay less Corporation Tax if you give any of the following to charity:

1. Money

2. Sponsorship payment

3. Your employees via a secondment arrangement

4. Equipment/tools

By thinking of charitable ideas with your employees, you can inject some festive cheer into your company and your team, and it won’t be costing you any more with HMRC!

Hopefully, this has given you some ideas on how to prioritise festive spending for your business, and – from all of here at Brett Nicholls Associates – we hope you enjoy this festive period! We wish you all a Merry Christmas and a Happy New Year!

This article is just for guidance only. Expense claims can be a complicated area of taxation, and you should always consult your accountant if you have any questions. Email hello@bnassociates.co.uk or call 0141 334 1318 to contact our friendly accountants if you are looking for support,