Festive excess may mean hefty bill
Christmas excess could leave employees in Northern Ireland facing a hefty bill, a tax expert has warned.
Spending more than £150 per head could leave revellers facing a sobering bill from Revenue and Customs. This includes the cost of taxis home and overnight accommodation.
Renee Dawson, a consultant at tax experts Grant Thornton, said: "The current economic climate and budget constraints are in themselves enough for employees to cancel their annual gifts and parties. However, if employers do want to keep morale up and reward hard-working staff, they should also consider potential tax implications around their celebrations."
With the economic downturn continuing, many employers are cutting back on traditional Christmas perks. People are increasingly being asked to pay their own way or have no festive party.
Everyone from teachers to lawyers, insurance brokers to journalists, is experiencing the austerity.
Generally tax relief is only available for annual parties that are available to all staff, limited to £150 including VAT per head. Tax restrictions mean the cost of entertaining employees may fall within the benefit in kind rules, giving rise to tax liabilities for employees.
Ms Dawson added gift vouchers were also taxable.
"Check with HMRC or a tax expert before planning your Christmas party or buying employees gifts," she said.
"A large tax bill in January either for employers or employees will mean that celebrations will be remembered for all the wrong reasons."
The Queen has scrapped a Christmas party for her staff because of the "difficult financial circumstances" facing the nation.