Employee entertainment and the taxman

Jersey loophole? “Dutch sandwich”? No, just a good old British toast!

Last year, in the run-up to Christmas, I organised a special event to mark Krescendo’s XVth anniversary.

I worked hard to make a two-day commitment for my employees and their close families, at a time of the year where weekends are at a premium, into an opportunity for personal and professional growth within the beautiful setting of Hever Castle.

Still, for the taxman there is a very fine line between employee entertainment and training, the general assumption being that if you ‘treat’ your employees outside of company time you are providing a taxable benefit – which means whatever the company pays for will end up costing almost twice as much if the Revenue believes it was just a ‘jolly’ for your staff.

With this in mind, my Accountants recently asked me to clarify a few points… which I decided to share because – in responding – I felt like a raw nerve had been touched, stimulating a deeper-than-expected reflection on the core values of my company – the kind of core values I expect many entrepreneurs and managers will relate to.

Q:

Please clarify whether the activities carried out:`
– are likely to prove, useful to the employee when performing his/her duties or
– will qualify or better qualify the employee to undertake employment, or to participate in charitable or voluntary activities arising through employment.

A:

BOTH. 

An essential part of working in any company, in particular a small company like Krescendo, is the ability to relate on an interpersonal level with peers, juniors and seniors. 

Ours is a context where day-to-day activities require significant concentration in a mostly silent environment where information exchanges can breakdown – with consequences – if trust, empathy, knowledge of the person sitting opposite you is lacking.

Sharing, discussing, understanding each of the employees’ worth was the foundation of the activities during the day.  This is why we hired a trainer with a strong track record in coaching, soft skills and motivation.

Building from this foundation was the core message of targeting future growth, expressed as the product of individual contribution and collaborative effort as opposed to the chasing of theoretical targets on spreadsheets and charts.

A software engineer in a creative outfit needs the confidence to operate with great responsibility and independence, qualities that can only arise in an environment where the level of understanding between collaborators goes beyond an ability to execute well-defined procedures and instructions. 

In Krescendo, such qualities are sought when recruiting and are actively supported and fostered throughout the employee’s tenure in the company.

Q:

Please can you confirm for me what the family members/partners did whilst the employees partook in the team activities such as the Treasure Hunt, People Bingo and the Murder Mystery etc.

A:

The first seminar, focused on individual sense of worth in contributing to success to date and future growth was limited to employees and shareholders only while family members had a couple of hours of free time.

The other activities involved other invitees on a voluntary basis.

However, family members were mixed because – beyond the “fun” elements – the training aimed at encouraging interaction and communication across the restricted boundaries of co-workers, practising ways to see and talk about the company in a more “open” context, such as may be the case when talking to potential clients or partners as delegates at conferences and meet-ups. 

The treasure hunt was designed – via all the clues – to reinforce company-related messages of belonging and achievement, and the murder-mystery dinner to promote teamwork across people who do not normally relate with each other in the office (teams were specifically chosen by the trainer with this in mind).

All the activities were filmed with a view to creating a marketing video for the company that was used in Christmas communication with all existing (email) and potential clients (LinkedIn and Twitter). The presence of family was instrumental in conveying balance and closeness, in a commercial context where Krescendo thrives because clients require a personal touch from individuals who must be able to operate efficiently under stress as they run critical technology platforms for their firms.

Finally, it is essential to underline the value and gratitude Krescendo places on the indirect contribution that close family brings to the business: family who are instrumental to the physical and mental well-being of the employee outside work, which reverberates in the level of motivation and productivity expressed at work; who can better support and understand the employee – especially when things are challenging or stressful in the office – by actually KNOWING on a personal level the co-workers of their partner. 

 

One comment

  1. Marco Cedola · · Reply

    Well done Gabriele!

    Congratutulations

    Marco

    Like

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