Hi and thank you in advance for any answers,
My client employs CIS subcontractors and is throwing a Christmas party. Are the expenses allowable as staff entertainment or disallowed as supplier entertainment?
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Entertaining (not staff)
The subcontractors are NOT employees (unless adjudged to be so after HMRC investigation, for example for being regarded as "part and parcel of the organisation" - ie. treating them like employees in all respects except employment taxes). Some in the construction industry even provide, free of charge, vans to their "subcontractors" who are claimed not to be "employees", then there are those who invite them to the staff Christmas party.
So, in my view, it is a non-allowable expense of entertaining suppliers - unless an employer (engager) wishes to push their luck with regard to status issue.
Agree - you can't have it both ways
You can't call them subcontractors then expect to include them in an employee party without expecting serious questions re status.