How to avoid an unexpected tax bill from overseas events

Rules on taxation can be unclear when businesses are trying to arrange client and staff entertainment, training, or conference events overseas.

C&IT magazine recently spoke to Ben Turner, co-founder of the International Music Summit, about how music professionals overcome the challenges of working all over the world, where countries have their own rules and regulations on tax. But it’s not just creatives that are concerned about what the rules are when abroad: 

Below is a guide, from UK tax experts, Perrys Chartered Accountants in partnership with five-star luxury ski resort, Les Rives d’Argentière in Chamonix, Mont-Blanc, on regulations abroad and how to avoid an unexpected tax bill:

Client entertainment

Due to a global rise in anti-bribery legislation across industries, there is a definite decline in lavish client entertainment. But companies still need to show their appreciation for highly valued or long-standing clients. However, businesses should be aware that they will generally be unable to obtain tax relief from HMRC on these kinds of expenses.

Staff entertainment

Providing entertainment for staff -  like summer barbeques or Christmas parties - is usually a tax deductible expense. But many businesses do not know that there could be personal tax implications for their staff if they fail to adhere to the regulations.

It will be considered as a taxable benefit in kind on the staff and must be included on their P11D unless:

• The cost of the function or party, including VAT (whether or not this can be reclaimed) must be less than £150 per head – in addition to venue hire and bar bill, this also includes the cost of providing transport or overnight accommodation

• This £150 limit is an exemption and not an allowance, which means if the overall cost of the party amounts to £151 per head, the whole amount will be taxable on the staff attending as a benefit in kind (not simply the £1 excess)

However, it’s worth noting that the £150 limit can also include spouses/partners if they attend the event, therefore the overall limit could effectively be doubled. Meals or trips away provided to staff as a reward for good performance will also be a taxable benefit for the employee. 

Conferences

Conferences are tax deductible expenses as they fall under employee ‘training’, which are incurred for the purposes of the trade, but in some cases they can be identified as a staff benefit.

The questions is whether costs are taxable on the staff personally:

• If the conference takes place overseas it will not necessarily change the tax treatment, but it is likely to attract greater scrutiny from HMRC.

• If the trip is exclusively for work, and personal benefits are incidental, then it is unlikely there will be any personal tax implications on the staff.

• The employee may also be required to demonstrate that their attendance at the conference was necessary for the performance of their duties.

• If the trip is primarily business focused, but includes a subsequent ‘holiday’, then any additional costs incurred would be taxable on the staff

• Unlike staff entertainment, if spouses or partners attend a conference that has been paid for by the business, any additional costs incurred by their attendance would be taxable on the staff.

 

For more breaking news and in-depth features, sign up to C&IT's daily News Tracker here.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Register now
Already registered?
Sign in
London calling: A look at what's new and forthcoming in the capital

London calling: A look at what's new and forthcoming in the capital

Hotels, venues and activities that should be on your radar for future London-based events.

Double acquisition for Gray Dawes Group

Double acquisition for Gray Dawes Group

Acquisitions include INC. Travel Group's corporate and marine businesses and the purchase of VIP Leisure Travel Ltd.

Love is in the air for one in seven event attendees, report claims

Love is in the air for one in seven event attendees, report claims

Research by Cvent and Edelman Intelligence finds 14% have met a significant other at a B2B event.

The advantages of being a second tier city

The advantages of being a second tier city

There are benefits to not being the capital, says Bas Schot, head of congresses and events at the Hague Convention Bureau.

What to do if a disgruntled event attendee threatens legal action

What to do if a disgruntled event attendee threatens legal action

Keystone Law's James O'Flinn discusses your options and how to prevent this happening in the first place.

Speakers announced for C&IT Northern Forum

Speakers announced for C&IT Northern Forum

New event takes place between 25-26 April at ACC Liverpool, with inspiring sessions from industry leaders.

Why personalisation is the key to measuring an event's success

Why personalisation is the key to measuring an event's success

Mike Leeson, general manager Europe at ETM, explains why ROE may be a better measurement than ROI.

Oman to welcome IGRC in 2020

Oman to welcome IGRC in 2020

Sultanate to host the International Gas Union's 16th International Gas Research Conference at the Oman Convention & Exhibition Centre.

Events company faces legal action from makers of video game Fortnite

Events company faces legal action from makers of video game Fortnite

Epic Games issues claim against Exciting Events after widely criticised event in Norwich.

Diary of a delegate: Beautiful Bergen

Diary of a delegate: Beautiful Bergen

A three-day account of the C&IT A-List FAM trip, in partnership with Visit Norway.

LATEST JOBS