Avoid a New Year tax bill, claims expenses expert
Dealing with the enormous amount of Christmas expenses can be a difficult time for those who have just started their own recruitment franchise.
However, one expert has collated some of the most common ways to avoid an unexpected tax bill in the new year.
Sanjay Parekh, Managing Director at webexpenses, highlighted that sending out Christmas cards to clients and prospects is classed under ‘office expenses’ and is therefore tax deductible. In addition, small promotion gifts costing less than £50 are also tax deductible.
Also, the humble Christmas party is also a tax deductible item, reports freshbusinessthinking.com.
“HMRC stipulates the event must be open to all employees and the total cost per head must not exceed £150,” advises Parekh. “The total cost is calculated as the total cost of the party including transport, accommodation and VAT.”
Furthermore, any Christmas event thrown to promote a franchise to clients or prospects falls under ‘entertainment’ and is therefore 50 per cent tax deductible, adds bdaily.co.uk.
However, planning and budgets are essential for business owners. It’s important to consider when owners can actually afford an extravagant party in the first place and, if they can, do not get carried away.
“More importantly, working out a budget is making sure you stuck to it. Communicate both the budget and relevant policy and legislation to senior members of staff to make sure no one gets carried away,” he added.