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Could 2011 VAT Rises Effect Next Year's Corporate Christmas Party?
With 2010 being a great year for Christmas party organisers as many parties in London and Birmingham were sold out for December 2010, earning Corporate Christmas party planners a substantial amount of profits not far off from the high profits before the recession, it could seem that the corporate Christmas party is back on top. However, with VAT on the rise and later on this year, national insurance, it could be that the annual Christmas party once again suffers.
In early January, the government reestablished the VAT level at 20%, which will cost the average family an extra £389 per year to run a basic household.VAT levels will affect most consumer goods, specifically petrol costs are hard hit and extra consumer expenditures, such as electric goods, holidays and perhaps, Christmas parties.
Although most businesses can attend or host a Christmas party for their employees tax free as long as it's under £150 per head, with costs and VAT rising, so will the cost of the Corporate Christmas party. The fear is businesses will opt out of corporate parties, in case they over spend and incur extra National Insurance and income tax payments. Obviously, this would incur a nightmarish disaster for both parties as Corporate Christmas party organisers would have a decreased number of clients (which may raise costs further) and businesses would not be holding Christmas parties to thank their workers. Fortunately, these extra costs can easily be avoided with a little planning!
Although none of us can avoid the VAT, businesses can still hold a corporate Christmas party within their limits if they look out for good deals and plan ahead of time. Remember the £150 per head includes per person the cost of entertainment, venue, accommodation, transport and other associated party goods (i.e. food), as well as VAT. So when you calculate your costs per head, remember to take the new VAT rate into account, otherwise you could lose out.
Rather than plan your own Corporate party at Christmas time, why not let your business attend a shared Christmas party instead? That way you only have to pay the ticket price, plus the VAT (remember to calculate the VAT). With a shared Christmas party there is no hidden or accidental costs, thus you can keep track on the amount you spend.
A further way to save costs is by planning in advance and booking your tickets in late summer. That way you can shop around and grab the best deals before they are all scooped up.
Another way of making sure you stay within budget is by attending a local Shared Christmas party, as you won't have to fork out on expensive travel, such as trains and coaches or accommodation. Travel particularly into London is very expensive, so unless your company is based in London, it may not be worth the expense. It's important to keep costs down by finding a venue that is accessible by all, so that you only need to set aside enough for taxi fares or a shared minibus for your employees.
Conclusively, VAT will have an effect on party costs. However, shared Christmas parties are still relatively cheap, starting well under the £150 per head budget at around £40pp+vat. Although the VAT rise will increase costs, it will have a small impact on shared Christmas party costs overall, meaning for most businesses Christmas parties are still affordable. So good news, it looks like the Christmas party is still likely to be on for 2011!
If you are interested in a shared or exclusive corporate Christmas party for your business/office in 2011, have a look at www.christmascorporation.co.uk
About the Author
Marie Coles is a professional writer. She writes informative, yet, dynamic articles on Christmas parties.
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