What you need to know about staff entertainment and VAT


HMRC are closely scrutinising staff entertainment, and from the three cases we have seen recently, two employers were unaware of any restriction to taking their workforce out.


The tax exemption for staff parties is currently £150 including VAT per attendee, assuming all HMRC requirements are met, and records should be retained of both the cost of each and any such entertaining and the attendees.


There are also VAT complications where staff are allowed to bring spouses/significant others.