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HMRC internal manual

Employment Income Manual

Particular benefits: third party entertainment: interaction with £8,500 calculation

An employee or office holder is exempt from tax on employment income on certain goodwill entertainment, provided by third parties, for him or her or for a member of their family or household (see EIM21837).

Entertainment that qualifies for exemption should be left out of any calculations in respect of:

  • the £8,500 test for employees for 2015/16 and earlier years only (see EIM20100 onwards)
  • the calculation of net earnings for the charge on expenses connected with living accommodation (see EIM21722 onwards).