As the Christmas party season is upon us we are pleased to report that the tax-free amount allowed for the cost of an annual employees’ party has been increased from £75 to £150 a head from 6 April 2003. The event needs to be open to the staff generally and £150 per head means the total cost of the function including VAT and any transport or accommodation provided by the employer divided by the number of people attending. If the cost is more than £150 per head then the whole amount is taxable.
Any keen cyclists among your employees will be pleased to note that not only can they claim 20p per mile for any business miles they do on their bikes but they can also now benefit from an unlimited number of nominated ‘cyclists’ breakfast days’ without suffering a tax charge. Enough to make you think about taking to the bike?
Don’t forget that the government is still planning some changes to the rules on company vans. The effect is likely to be to make them more expensive for the employee in terms of the taxable benefit. The changes may take effect as soon as April 2004 so please talk to us if this is relevant to you.