If the cost per person exceeds £150, you need to be aware of the following tax impact-the company benefits from tax relief on the expenditure- but the full amount will be a taxable benefit on your staff.
Let us look at a real-life example:
Scenario:
You decide to take all your employees out for an annual summer party, the costs associated with this function are as follows:
- £50 (including vat) for travel per person
- £100 (including vat) for a ticket to the event
Overall cost is £150 (including vat) per person which is at the £150 per head limit per year-so the company benefits from tax relief in full and there are no personal tax implications on the employee.