Christmas humbug or Christmas cheer? If the festive season goes ahead, here are some tax pointers

As November drew to a close the future of Christmas 2021 was balanced on a knife edge as experts scrambled to predict the path of the newly-emerged Covid variant.?

Would we be OK with our planned celebrations, or would we be back in the isolation of lockdown? The Prime Minister, in his news conference, cautiously pointed to the former.

At?ExpenseOnDemand?we believe in optimism, and recall the Monty Python song ‘Always looks on the bright side of life’.?

So, with that in mind, ho-ho-how many ways are there to squeeze back a little tax..? We’re not talking Pandora Papers here, just perfectly legitimate claims you can make.?

Try these on for size:?

1. Looking trim:

Unless your business is run from home, you can claim tax relief on Christmas decorations. Simply log their cost in your accounts with the other day-to-day running costs. Capturing the receipts and claiming the cost back on expenses is a gift using the ExpenseOnDemand expense management app. Sadly though, when it comes to decorations at home, you’ll have to foot the whole bill.?

2. A time for giving 1:

The letter of the tax law allows you to record gifts for clients as business costs, so long as you follow some simple rules. What you give must carry a conspicuous advert for your business; you mustn’t spend more that ￡50 on any individual client; and you’re not allowed to give vouchers that can be exchanged for goods or cash, food, drink, or tobacco. (Though when it comes to drink, we’ve seen a great many ‘liquid-filled paperweights’ change hands…).?

3. A time for giving 2:

What if you want to give something to employees? If it has no cash value, then it might fall under the HMRC definition of ‘a trivial gift’. If that’s the case, there’s no need to record it on a P11D or pay an NI contribution. If it has a cash value, then the reverse applies. But here’s a thought: how about the gift that could be said to be priceless – an extra day or two’s holiday. You might consider letting everyone stay at home between Christmas and New Year, for example. If your business runs 24/7, you might be surprised at how many people would prefer to come to work for premium rates of pay rather than spend time with members of their family, sad though that is… And finally, any cash gift or ‘bonus’ will simply be extra earnings as far as HMRC is concerned, so that’ll have to go through payroll in the normal way, and attract the normal tax.?

4. Let’s party:

Hang on a minute. Covid restrictions aside, there’s currently nothing to stop you having a party, but the fun’s likely to stop when you get to the tax implications. These depend on who’s there and who’s not, and how much you’ve spent. The letter of the law is explained on the Government website here.?

So you can see that when to comes to Christmas, working out what tax you may (or may not) have to pay depends on a number of factors. The simple part is recording it all, if you turn to the?ExpenseOnDemand?expense management app. With our feature-rich low-cost expense reporting tool integrating all of the numbers into one easily navigated place turns all the number crunching into child’s?play. Discover more about our expense report app?https://www.expenseondemand.com/get-started?.?

Start with looking at our expense management app as a cost effective and product efficient solution?(Prices start from GBP 1/USD 1/EUR 1/AUD 2/INR 35). Scan here to?book a demo

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The writer has founded ExpenseOnDemand with a vision to enable companies to lead a paperless and a hassle-free business process by offering a smart, simple, & intuitive expense management solution.

Sunil NIGAM?bolstered the technology base & aced the business model to make solutions affordable to everyone – at $1/user/month, making it the most trusted cloudbased application by SMBs of over 96 countries..and perhaps the best expenses app in the universe!

Find out more on?https://www.expenseondemand.com/expense-management-software?/?

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