Christmas is a wonderful time of the year to consider taking a break, especially since in the construction industry, these opportunities can be rare.
With only 5 weeks to go, we have done a top ten of the Xmas benefits which may provide some handy little tips for you, your staff and your clients so you have a bit of time left to come together and as business owners show how we work towards building a better team and improve staff retention,
Your Accountant might have already laid all this out for you and helped you with this year on year but just in case they are not showing the Xmas spirit! Here it is!
🎁 A Seasonal Gift (Trivial Benefits)
You can gift your staff a nice little gift as a little thank you for all their year's work! As long as each gift is less than £50 to provide! Here are some examples:
- Amazon Vouchers
🥂 The BIG Get together.
Plan your big get-together but also plan it to make it as tax efficient as possible. To gain the tax exemption;
- The party cost per person needs to be below £150 (inc VAT)
- It's a one-off annual Christmas party at one location
- It’s open to all employees
* Virtual Parties are still eligible for the annual exemption.
HMRC will be nosey and sniff about if you go over the £150 per person exemption, the full amount will become taxable on you and your employees! HMRC say it’s an exemption, not an allowance, you have been warned!
VAT, great eh!
Okay, here we go.
If you entertain your staff only including the directors you can claim back the VAT element of that if it is for business purposes. It does not cover wife/spouse (unless they are part of the business) or ex-employees.
👷♂️ Gifts and Treats Over £50 to Employees
Sorry everyone, no luck here. Bah Humbug! If you give an employee a gift over £50, a bottle of wine, food, cash voucher - HMRC will want to know the value and then apply that to the wages!
If you are going to buy gifts over £50 or alcohol or food you will need to allow for this element again.
🍾 Prezzies for Clients
If you would like to receive tax relief on presents to clients, the gift has to be branded i.e. a branded hoodie or a branded water bottle!
It cannot be a voucher you can exchange, alcohol, food or tobacco. If you do send food/alcohol etc then you won’t receive tax relief on this amount.
Beware it can only be up to £50 in value. If you spend more than that HMRC will penalise you for the whole amount, nice eh?
❄ Corporation Tax
Is it true what they say? If you are a Limited Company you can claim back the full Christmas Event against your Corporation Tax?
then the answer is……… YES!
What's that I hear? “Can you do this for a Summer BBQ as well?” YES.
A great idea to get everyone together, focusing on team building and staff retention.
The Tax man is clever though and limits us to the cap of £150 for the year.
You will need to split it £75 per head if you have both functions. Are you a Winter Ball or more BBQ cookout firm?
Donations can be paid by the company provided they are to a registered charity and do not put the business into a loss-making position.
What do you get? Well, you can claim just like an employee however the first tip we gave you in regards to Trivial Benefits, Directors can only claim up to £300, a common example is to take 6 x £50 Amazon vouchers!
🥁 One Man Band
If you are a one-man band then put on your party hat. As long as you are an Ltd Company the same rules for the big firms apply to you. At Saint, we care about giving the solo enterprises the same high-quality information as the multi-million firms throughout the year and not just at Xmas
⚡ Electric Cars
If you are looking to treat yourself this Christmas have you considered an electric car? You can claim Annual Investment Allowance on the whole cost of the car receiving full tax relief. If you do use the car for personal use, there will be a benefit in kind charge however on electric cars this is as little as 2%!
🕊 What Does Saint Advise?
Sometimes it feels like the above points focus on big corporate businesses and HMRC forgets we are not all running multinational companies and booking out big halls for a Christmas meal.
Sometimes it's just 2 of you in a van or working from a front room and all of this seems miles away but you should still claim for what you can and why not take advantage of it!
At Saint we are family-oriented, making more time for you and working towards peace of mind and that can come in the little ways as much as the big things in life.
We are aware of the big ideas but it's always important to take time for the little moments in life. Here are some ideas of how to take a moment, and do something nice this Xmas for your staff.
For me to get out of running the business to see the kids at a School play was madness. With kids of different ages to pick up and just live was always a hard task. Getting there rushed and the phone on silent going nuts even though I told everyone I would only be away for a few hours. More than once I had to get up to talk to a client who was just pushing buttons.
For you and your staff to enjoy the moments that pass all too quickly. Maybe consider a day off for you are your staff so that they know you value and understand the little moments in life.
Allow for the staff to have half a day off so they can get to the shops and get just that moment of time to pick something up for themselves, their partner or kids or even to get a head start for the holidays
A Little Lunch
We never seem to get the time to be able to plan time during the middle of the day of a week seems bonkers to meet up and see the lights and stop for a moment to take in the Christmas feel in the hustle and bustle of a market or little place to stop for lunch with friends or a book.
Do Something Good
How about getting the team together for an all-paid but tax-deductible moment with your firm's local charity (also make a donation to offset against the corporation tax), to help out or just as part of a shared occasion? This is great PR and also team building for your company whilst giving something back with real interaction rather than sending a cheque. It can be great if it's say a Horse sanctuary where you have a mixed day of learning about the horses and maybe a chance to ride. As we are in the Trade, we can sometimes really help them out as we have all the tools and do a scripted quick 60 min makeover for them and get the Press involved - A great way to end the year and get the staff into the local papers for the right reasons this time.
🎉 That's a wrap!
I hope you found this useful! If you would like to go over anything we discussed within this article, please let us know by simply getting in touch here.
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