There remains no taxable benefit for employees, provided all staff are invited and the cost to the employer does not exceed £150 per head, inclusive of VAT.

If you have already held a summer event, as long as the combined cost of both events is no more than £150 per head, there will be no taxable benefit in kind. However, if the summer event cost £80 per head and the Christmas party £100 per head, only one event will qualify for the exemption, and employees will be taxed on the £80 benefit. Alternatively, the employer could cover the tax and NIC on behalf of the employees by entering into a PAYE Settlement Agreement (PSA) with HMRC.

For benefits to be included in a PSA, they must meet the following conditions: (a) The benefit must be minor, either in terms of the amount paid or the type of benefit provided or made available;
(b) The benefit must be irregular, in terms of its frequency or the times at which the sums are paid or the benefit is provided or made available;
(c) The benefit must be provided in circumstances where deduction of tax using the tax tables is impractical; or
(d) In the case of a benefit provided or made available, it must be shared between employees, such that apportioning the benefit between them is impractical.

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