In this week’s Q&A, Croner-i tax adviser Andrew Gilderdale gives the lowdown on tax deductions, eligible employees and benefit exemptions for staff parties and events
My client is a limited company and paid for a Christmas party for all its staff for the first time, including covering the cost of taxis home afterwards.
Can they get a corporation tax deduction for this and are there any benefit in kind implications for the employees? Some of the attendees were employees of a subsidiary company, does that make a difference?
While section 1298 of CTA 2009 generally prohibits the deduction of expenses related to entertainment for corporation tax purposes, there is an exception at s1299(3) where the entertainment is provided for employees of the company, unless:
‘(a) the entertainment is also provided for others; and
(b) the provision of the entertainment for the employees is incidental to its provision for the others’.
