11. Entertaining
See also:
- 11.1 General Principles
- 11.2 Refreshments, Meetings and Business Entertainment
- 11.3 Staff Canteen Facilities
- 11.4 Non-Business and Social Entertaining
- 11.6 Gifts to Staff
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 PAYE Settlement Agreement (Staff Entertaining) - application for inclusion 
(64kb). 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.