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Can you obtain tax relief on the cost of your office Christmas decorations? What is the accounting treatment?

It's day 3 of our Tax & Accounting at Christmas Advent calendar, as we analyse Christmas and tax and open a door to count down each working day until the Christmas holidays in the UK.

Accounting: your options

Expenditure on seasonal decorations can be analysed into the following revenue headings:

Tax: different treatments

Revenue expenditure

Capital expenditure

If you are already making Trading Losses, an excess spend on decorations will enhance your loss, or your capital allowances will enhance your loss. In these circumstances it is possible that loss relief may be restricted because you are:

a) Running an Uncommercial Trade (this restriction applies to companies and individuals)

b) Have reached your Cap on Income Tax Reliefs (this applies to individuals only and can affect, both losses and capital allowance claims.).

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