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Are you confident you know the difference between a reward and an expense? If not, we have broken it down to make it simple… 

Team Building Days Out

How to know if you are exempt from benefit in kind deductions for team building days out;

Official conditions state that, ‘as long as the training is designed to ‘impart, instil or improve or reinforce any knowledge or skills likely to prove useful when performing duties of any relevant employment.

Therefore if a training day an employer puts together for their team can be justified under the above rulings, e.g. improving employee’s teamwork, creative or leadership skills then you would be able to claim tax deduction on the cost.

Team days out will not be exempt from benefit in kind deductions if;
  • The activity has no relevance to the job in which they are employed in.
  • It is a ‘reward’ for the directors and or employees.
Annual Events
  • Annual events have a £150 limit per head and not per employee
  • If an employee does not attend the event their £150 limit cannot be extended across the event.
  • Events must be held every year, to become subject to tax deduction, e.g. special events such as one off ‘anniversary parties’ would not be covered.
  • If an employer allows partners of employees for example, the partner (although not an employee) also gets the £150 limit.
  • If the limit is exceeded per attendee, the whole event becomes taxable (not just the excess). For example if the total costs is £200 per head, everything is liable to tax deduction and not just the excess £50.
  • Cost per employee also includes, overnight stays and taxis.
  • If there are one or more annual event held by the company, the £150 limit per head can be extended across these. However if this is exceeded (e.g. if a company has two events, and one event is £80 per head and the other is £90 per head) then one entire event becomes taxable. The employer can choose which of these events they wish to incur cost on.
Representing the Company
  • If the company is being represented, for example at an awards ceremony, it could be tax exempt if it can be demonstrated that this is wholly and exclusively due to the role as an employee of the business,

 

If you’re still unsure about the tax liability of an employee perk or benefit,contact us at payroll@cebackoffice.co.uk or call us on 01270 899112 and we can help!