My client is a sole shareholder/director of his own one man company. He wants to claim £150 tax free for him and £150 for non existent guest to a non existent christmas party. He has read on hmrc somewhere that:
1.the company does not have to show any backup i.e. evidence of the party having taken place
2. there is a guest allowance of £150
So he just wants to make a withdrawal of £300 from the company to himself. I would have thought there should be some evidence of the party having taken place? And is he definitely correct about the guest allowance?
Thanks
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Replies (3)
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Ignore him
http://www.hmrc.gov.uk/manuals/eimanual/eim21690.htm
You can invite employee's family and members of household as guests.
You need to have an event(s) costing £150 each. Your client can't take money out of the company for no reason.
Agree with Peter
There has to be an event - he can't just take out £300 from his company. However, that event or series of events could be his staff Christmas Dinner or a meal out. Basically, the money has to be spent on something by the company!
Guests costs are allowed. The key is that the guidance refers to expenditure per 'head' rather than per 'employee'.