Q: I took myself and three employees to London for the weekend. Can I offset the cost in any way?
Mar 30 2010
Answered by: Clive Lewis Ask a question
The usual rule is that the costs deducted from revenue in calculating taxable profits must be "wholly and exclusively for the purpose of the trade". However, any sums expended on benefits for the employees or the directors are usually allowed as an expense from the business profits but they are treated as taxable earnings of the employees and directors.
There is an annual limit of £150 per employee on any entertaining undertaken by an employer for their staff. This total not only covers the cost of food and drinks but also accommodation and transport as well. If the amount spent exceeds £150 the full amount will become liable to Income Tax and National Insurance Contributions for the staff. The amounts spent if the total is over £150 must be returned on the P11Ds and the employees will be taxed as a benefit.
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