Are team building events taxable expenses?


Hosting a team building event can be massively beneficial to your employees, after all, the aim of most team building events is to enable your team to work more effectively together. This makes it also a benefit to your business, as you get a (hopefully!) more united team or group. But how do team building events affect the financial side of your business – and are they classed as taxable expenses?

Whether you’re hosting a corporate away day, a sales conference or a team building event, you may immediately think it IS a taxable deductible expense – but this isn’t always the case. It depends on whether your event is considered as ‘staff entertainment’ or ‘staff training’.

Use your annual exempt allowance

Mention staff entertainment and most people immediately think of things like a works Christmas party. Each company that pays tax is allowed a £150 per head tax exempt allowance to host an ‘annual event or Christmas party’. If you therefore haven’t used this allowance, you can use it for team building events.

Team training

Another option you have, in order to claim your team building event as a tax deductible expense, is to demonstrate that it constitutes ‘staff training’.

For an event to be a tax-deductible training expense, it has to be shown to be a necessary part of your employee’s role, something you require them to attend and closely relates to their job requirements. So you need to illustrate that it instils, reinforces or improves the knowledge and skills they need to do their job – and this can include working better as a team.

Careful planning

By planning your event well, you’ll be able to illustrate those things, simply by:

keeping an agenda to the day, that keeps the fun/social element to a minimum

prepare presentation slides

minute any discussions

So look to tie in all activities to specific roles and skills – such as team work, communication, problem solving, conflict resolution etc. It’s also harder to prove an event is for staff training, if it’s held abroad or is a particularly lavish affair, as these are more likely to be deemed as staff entertainment.

Staff entertainment

Staff entertainment IS a taxable expense. This includes team meetings held at the local pub, business lunches and the provision of staff refreshments (except tea and coffee.

As with any tax-related subject, it’s always better to play it safe and talk to your accountant or with HMRC, BEFORE you make any decisions or plans.

If you’re looking to host any work-related event in the Dorset area, whether it’s tax deductible or not, why not let us at Partyfield help? We have over 20 years’ experience and can provide everything from the entertainment to the bar staff. 

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