Allowance for staff entertaining

I am aware that the staff entertaining limit is £150 per head for the year and that if this total is exceeded then the whole entertaining amount becomes taxable.
I am also aware that this limit may be split over the year between different events
The issue I have is that we have a summer party and a Christmas party . the summer party came to approx £ 100 per head so I am a bit concerned over the cost of the Christmas party .
This leads to 2 quesitions ,

1. if we exceed this amount I presume the company and enter into a PAYE settlement agreement for total amount of tax due rather than have to use individual employees P11ds?
2. Also how is the figure per head calculated , is it for the entire company irrespective of how many attend the event . So for example in my company we are 20 employees , if only half the company attend an event is the tax limit for the year still 3,000 irrespective of who attends or is it done by head .

Hopefully that makes sense !

Hi Charles13
We can advise on the two questions asked as follows:

1. Yes the employer can enter into a PAYE settlement Agreement provided that it meets the qualification criteria. Guidance is available at: PAYE Settlement Agreements: Overview
2.  It is calculated on who attends.

Thank you

HMRC can I extend the question please. If an event, which was open to all employees plus a partner each, works out at say £200 per head, would the taxable benefit be £200 per staff member or, if they also brought a partner, would it be £200 for both, a total BIK of £400?

Hi Catherine,
I believe you are referring to the exemption for annual parties or similar functions.  
The exempt amount being £150 per head of actual attendees.  
However, if the cost to the employer is more than that amount, the full amount is taxable as a benefit in kind.
Where you allow your employees to bring a partner, and the exemption criteria is not met, then the benefit in kind value for each employee who brings a partner, is the cost to the employer per head multiplied by two.
This is because the partner is not an employee and therefore the benefit is charged to the employee that brought them.
Thank you.