Christmas is coming...

We hesitate to use the C word, but - in the interests of forward planning – have researched the tax implications of the festivities.

Essentially, a Christmas party (or any other event) paid for by the employer is not taxable on those attending, provided that the event is open to all employees at a specific location, and that the total cost of all such events during one year (including the costs of transport to and from the event, any accommodation provided, and VAT) does not exceed £150 per person – ie total cost of events in one year divided by total number of people (including guests of staff) attending. Employers can recover VAT on staff entertaining expenditure; although not on the cost of guests attending staff events – unless those guests pay a reasonable contribution to the event.

Christmas bonuses are considered earnings by HMRC, so PAYE tax and NI contributions are payable on any cash bonuses. Gifts from an employer, provided that they cost £50 or less, are not cash or vouchers, and are not given as a reward for performance, are considered by HMRC to be “trivial benefits” and so are not taxable. Gifts with a value of more than £50 (I know! Not very likely!) or which do not fit the rest of the criteria, are not considered trivial benefits and so must be reported on form P11D and NI contributions paid on the value of the gift.

A full guide to expenses and benefits, explaining in detail which are taxable and which are not, is available in the HMRC document 480 (2019) “Expenses and Benefits – a tax guide”, which can be downloaded from the website.

Incidentally, BADN membership fees (and GDC registration fees) are tax allowable (ie you can claim tax relief on them), as both are listed in HMRC’s “Approved professional organisations and learned societies – List 3”, also on the website. Although, in typical HMRC fashion, you will have to look for them under the letter “D” – “Dental Nurses British Association of” and ”Dental Council General”…. They couldn’t make it simple, could they?! Similarly, membership fees to “Dental Association British”, “Dental Hygiene and Therapy British Society of” and “Dental Therapists British Association of” are also tax allowable. To claim tax relief, contact your tax office – BADN members can also use our tax service, details of which are available in the members’ area of our website.

While we are on the subject of Christmas, the BADN office will close at midday on Tuesday 24 December 2019, and re-open at 9am on Thursday 2 January 2020.

(Originally published in the BADN column in November 2019 edition of "The Probe")