The 12 Tips of Christmas

We have put together our own version of the 12 days of Christmas. If you would like to find out more on any of these tips, please get in touch and we can work with you to ensure you achieve your goals and ambitions for 2015.

  1. Holding a Christmas party? – HMRC will allow employers to spend up to £150 per employee on annual events
  1. Can I invite anyone else to the party? – So long as the party is predominately for staff and everyone gets a £150 allowance
  1. Wanting to give a Christmas bonus? – All bonuses are subject to PAYE and must be paid within 9 months of the year end in which you would like the deduction
  1. Christmas gifts for employees – HMRC provide the following concession; “An employer may provide employees with a seasonal gift, such as a turkey, ordinary bottle of wine or a box of chocolates at Christmas. All of these gifts are considered to be trivial and as such are not taxable”
  1. Gifts to customers – Total costs should not exceed £50 and must contain a ‘conspicuous advert’
  1. Are there any implications to a gift of cash for family?
    Inheritance Tax needs to be considered here, and there are a number of exempt gifts:

    – small gifts (less than £250 per person per annum)
    – gifts within the standard annual exemption (£3,000 per annum)
    – gifts made in consideration of marriage (£5,000 per child or £2,500 per grandchild)
    – ‘normal gifts out of income’

    It is important to keep records of gifts made for Inheritance Tax purposes, and we would recommend discussing any gift with us before making it

  1. Wanting to pay staff early? – With RTI, remember that details of your payroll need to be submitted to HMRC before payment is made to your staff
  1. Pension contributions – For many of our clients, we are approaching their financial year end. If you have accounted for pension contributions for either yourself or your staff, please ensure that they are physically paid before the year end in order to claim the deduction in that period
  1. Income shifting – Married couples/civil partners should ensure that their finances are arranged to utilise each personal allowance and their basic rate bands. It might be sensible to transfer income producing assets to a spouse to take advantage of their lower taxable income
  2. Put any mobile phone you have in the business name and all costs of the phone are deductible (you do not have to split business vs non-business calls)
  3. Annual Investment Allowance (AIA) – The AIA limit was increased on 6th April 2014 from £250,000 to £500,000 on qualifying asset purchases, providing 100% tax relief within the limit to reduce taxable profits
  4. Lastly before you get too “merry” don’t forget to plan for the New Year as automatic penalties are now imposed if you do not file your Self-Assessment Tax Return on time. Do not forget there is an automatic £100 fine if you do not file your return by 31st January 2015

Please get in touch to discuss these tips on 0161 249 5040