11. Entertaining

See also:

11.5 Taxable entertaining

(a) Options available

Where the University pays for or reimburses the cost of taxable entertaining it has an obligation to account for the tax to HMRC.

It has two methods available:

(i) PAYE Settlement Agreement (PSA)

The University has a PSA for staff entertainment. This is described in detail on the PSA Application Form (70kb). In summary, this is a mechanism that allows for the department to pay for the income tax and National Insurance contributions due against taxable entertaining. The charge is calculated through ‘grossing up’ the value of the entertainment provided on the basis of the proportion of basic and higher rate taxpayers who attended. For examples of how this works, see Appendix 4.

Note: Under this method, the department bears the cost of tax and National Insurance.

(ii) P11D

If a PSA is not used to cover taxable entertaining then the only other option is to report the event to HMRC as a taxable benefit to the individuals who attended. This is done via the annual P11D process.

Note: Under this method, the individual bears the cost of tax and National Insurance.