• SAGE


0161 928 3276



We understand our clients

Getting Your Business to Pay for Your Holiday!

Newsletter issue - August 08.

It's the holiday season and you may be tempted to get your limited company to pay for some or all of your holiday costs. If you do this you will normally be taxed on the entire cost, but exactly when you pay the tax depends on how the holiday was arranged.

If your company contracted with the travel agent, airline or hotel to provide tickets and accommodation, the cost is not immediately taxable on you. But where the trip had no business function the cost must be included on the annual form P11D and you will pay the tax due in the following tax year, or the next one. The company has to pay class 1A national insurance at 12.8% on the value of benefits declared on the form P11D, but you as the employee do not have to pay NI on the cost.

Alternatively you may have arranged the holiday yourself and then your company picks up the bill. In this case the cost of the holiday should be treated as extra salary at the time the company pays the bill, so effectively the cost is put through the payroll, incurring both employers and employees NI.

It is possible that some part of your trip is business related. Perhaps you have a customer in Switzerland you need to visit. If your company pays for you and your spouse to spend a week in Switzerland the total cost of the trip must be apportioned according to the business and private elements. You should record who attended the business meetings, on what days they were held, and any associated costs such as local travel, and meals. If your spouse was not involved in the business meetings, their air fare and accommodation is not a business expense, so must be declared on your P11D, or on their own P11D if they are also an employee of your company.

The tax rules are different for companies and for unincorporated businesses. When you work as a sole-trader or in a partnership, there is no employers' national insurance due when the business pays for the owner's private expenses such as a holiday. The private element of the trip is treated as part of the business owner's profit for the period and will be subject to income tax and class 4 NI, just like the rest of the profits made in the period.


To work Smarter in your Business Contact Beauchamp Charles

Contact Us

"Join our newsletter for hints, tips and tax advice"


What our clients say

Dakins Property Services

Great Results, Personable, High Integrity

Choice Events Limited

All at Beauchamp Charles are very helpful, approachable and easy to talk to. They keep me informed with key dates; I can feel totally confident that I won't ever miss any deadlines! Whoever I deal with, always deal with matters professionally and efficiently and if they are unavailable they get back to me promptly.

FT leisure Ltd

I have worked with Beauchamp Charles as our management accountants for over 20 years and have never received anything less than exceptional service. Their approach is both professional and personal. Finances and particularly tax strategies are a minefield for small businesses; Beauchamp Charles have in-depth knowledge of these area, which is comforting. They pay very close attention to our business activities and have provided financial strategies that have helped our company develop.

Fredrick Thomas Electrical and Maintenance

We have used Beauchamp Charles since company formation back in 1998. Beauchamp Charles offers us a one to one service as they are small enough to offer this dedicated service and large enough to do the work and offer best advice. They get to know us as individuals and a business, always giving sound advice. Frederick Thomas Electrical are in a stronger place thanks to the service we get from them.

Barnes Walker Landscapes Limited

We are a small business and had employed the same accountancy firm for many years. Two years ago we took the decision to switch to Beauchamp Charles after several othe local businesses recommended them very highly to us. We have not been disappointed with the service they have provided to us over these last two years.