On the sixth day of TAXmas, we advise to thee on the tax treatment of staff lunches...
It’s the time of year when employers encourage employees to be more sociable, thank them for their work over the course of the year, and generally take the time to eat, drink and be merry (in moderation, and with general wellness in mind). Some of these festivities involve providing employees with food and drink, either in the office/employer location or at local restaurants/coffee houses or public houses.
Fortunately, the legislation allows the provision of food and drink on an employer’s premises without there being a tax liability or reporting requirement as “employee entertaining”, but only where certain conditions apply.
The main condition (apart from the food and drink being provided on the employer’s premises) is that all employees should be able to access the free or subsidised food and drink, so everyone can enjoy a Merry Christmas.
If the food and drink is provided away from the employer’s premises and/or not everyone is invited to enjoy the Christmas fayre, then employees could end up with an expensive tax and NIC liability, especially where an employee is reimbursed for the entertaining for all their work colleagues.
If you need any help with employment tax matters, either for the Christmas past, present or the future, please get in touch with us at email@example.com.