on the up Home | News & events | Legal updates | Let your employees watch the World Cup? Don't forget to claim tax relief

Let your employees watch the World Cup? Don't forget to claim tax relief

30 June 2010

Employers who allowed staff to watch England’s World Cup matches should not forget that they may be able to claim tax relief on any expenditure incurred.

The cost of staff entertainment provided by an employer, for example hiring a large TV to screen matches, is tax deductible for the employer, thereby reducing the amount of the employer’s profits that are subject to tax.

If a staff event was combined with entertaining clients or customers, the cost would still be deductible if the main purpose was to entertain employees. Alternatively, if the main purpose of the event was to entertain clients or customers then, whilst the proportion of the cost relating to entertaining clients or customers will not be deductible, the proportion relating to entertaining employees will be.

In addition, any VAT incurred on staff entertainment can be fully recovered providing only employees attended. If individuals other than employees attended, the proportion of VAT relating to the proportion of non-employees attending compared to the total number of people at the event cannot be recovered. If the party was restricted to directors or partners only, VAT is not recoverable.

Similarly, any gifts or prizes provided to employees as prizes are also tax deductible for the employer and, if they are classified as ‘trivial gifts’ by HMRC – which a bottle or two of wine, chocolates or flowers would be – the gifts are not taxable on the employees.

Also, any VAT incurred on the cost of such gifts can also be recovered, providing the gift given to each employee costs £50 or less and is not part of a series or succession of gifts to the same person.

So having incentivised your employees to come to work during the World Cup, don’t forget to claim your tax relief.

© Shoosmiths. This page is for general information: it is not legal advice. Please read our full terms and conditions for details of the disclaimers and exclusions which apply.

Are any of the issues in this article giving you a headache? If so, we want to know

Name *

Comments*

The information you provide here will be used solely for the purposes of responding to your query for more information see our privacy policy.
 

Get in touch

Tom Wilde

Associate
T: 03700 86 8713
I: +44 (0)118 965 8713
E: tom.wilde@shoosmiths.co.uk