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Sam
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I am after a bit of guidance on a team building away trip

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Hi I am after a bit of guidance on a team building away trip we are thinking of organising.
I am a director of a marketing services agency and we are considering taking our 7 designers away to Barcelona for a few days. We will inevitably be talking about work while there and have a bit of an agenda to run through before a bit of downtime.
I just wanted to understand how HMRC viewed this and how it should be treated in the accounts. Do we need to book a specific meeting room while we're there and show proof of this? Should we minute the meeting(s)?
The costs are likely to be around £5k consisting of flights / hotel rooms for a couple of nights and a few meals and beers along the way.
Happy to incur what ever costs are required to formalise this in the eyes of HMRC. Also would this be put down as entertainment (and therefore adjusted in the corporation tax comp at the year end) or allocated something else in the accounts / training / meeting costs?
Many thanks in advance for you assistance,
Adam
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question
This would be part business trip and part leisure (holiday)
Yes do minute the meetings and keep any other evidence of the business elements - as all your employees will have a tax charge arising on this cost (to represent the non business element) and you will need to enter this cost on a P11d for each employee for them then to have a % disregarded (through a S336 claim) for the business element
You through your accounts can have the full cost and again I would recommend that you apportion the costs for business (so the costs of hiring out any business rooms for meetings etc) and any team building exercises specifically designed to bond - I am afraid a few beers down the local eatery does not constitute team building in HMRCs eyes!) and that which is just personal - which I would put down as entertainment and add that cost back in
Let me know if you require any further assistance.
Thanks
Sam
But
Customer: replied 1 year ago.

Hi Sam, thanks for your reply to my question below. That sounds quite complicated and I didn't really want the staff to incur any additional costs for the benefit as this is really more of a 'research trip', we'll be visiting a photography exhibition and also attending a design conference. Is there a much simpler way of doing this that may cost the company more money but will not involve the staff being taxed / P11d's etc?

The trip is planned during the week in working hours so we will officially be working.

With the burden of all this red tape it might be simpler for me to not bother with the trip after all?

Expert:  Sam replied 1 year ago.
Hi Adam
Thanks for your response
The only consideration would be for a PAYE settlement agreement
https://www.gov.uk/paye-settlement-agreements/overview
This applies to small (which this is not) or irregular payment s which this is - and you then cover the PAYE tax and National Insurance - and then do NOT need to complete a P11d -
And this is perhaps your best bet. But there are no guarantees that HMRC will accept this.
The other option is to make each day more work related throughout each full day (somehow) so that the only R&R time is evening - which is acceptable. (and maybe ensure people pay for their own evening meals and drinks - unless the place you plan to stay is fully inclusive) then you have a good argument should HMRC try and challenge the position if they disagree this is fully business.
I do understand your frustration but unless a trip is fully and exclusively in the performance of work duties then HMRC take issue to it which I am sure you can appreciate.
Let me know if I can be of any further assistance
Thanks
Sam
Customer: replied 1 year ago.

Hi Sam, that's great thanks for getting back to me. We are planning on leaving Thursday evening getting there at 10pm, and returning midday Saturday so if we were to ensure Friday is filled with research and the design event and we just have the Friday evening as down time (and then only the one meal which we'll put down as entertaining - that would be acceptable.

Sound about right?

Really appreciate your help thanks

Expert:  Sam replied 1 year ago.
Hi Adam
Thanks for your follow up.
I would accept this all as business due to
1) the short duration of time
2) The fact there is research and development as well as team building
3) Friday breakfast, Friday evening meal and Sat breakfast I would consider all business
So just make sure they pay for their own meal for the journey Thursday lunch Friday and drinks
Then there will be NO need to declare this other than business travel and subsistence.
Make sure you call this trip a business for the design conference.
If you had two days work aspects and then 3 more, just having fun, this would later the position but this trip is not going to leave time for any non business activities as such!
Do let me know if I can assist any further, but in the meantime it would be appreciated if you could rate the level of service I have provided.
Thanks
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13775
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Sam very sorry for the late reply. You've been fantastic, thanks ever so much for clarifying.

Expert:  Sam replied 1 year ago.
Hi Adam
You are very welcome
Please do take the time out to rate the level of service I have provided as this ensures that Just Answer credit me for my time
Thanks
Sam

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