Humbug! Trust an accountant to spoil the seasonal festivities

People & Business

Scrooge is alive and well. Trust the accountants to spoil the Christmas fun. David Harrison, national tax director of Kidsons Impey, is advising companies to rein in their spending on office parties.

Mr Harrison warns that employees may be nursing unforeseen tax bills as well as sore heads if their employers exceed the tax allowance of pounds 75 per individual for festive entertainment.

Mr Harrison says: "Employers must plan carefully to avoid exceeding the pounds 75 limit. This is a cumulative total for the whole tax year and includes the cost of VAT and any transportation." So taxis home are subject to that tax man's eagle eye, as well as the usual bubbly and canapes.

According to Mr Harrison, if the employee's tax free benefit is broken, then the total benefit - including the pounds 75 - is assessable "on every employee attending the functions".

The pain will show up on the empoyees' tax liability in April, he adds. "Employers should check the cumulative totals and, if there is any danger of exceeding the limits, consider a small recharge of some of the cost to avoid liability to tax."

"A small recharge," eh? Worse is to come. Mr Harrison concludes: "If you are planning another company function in the spring, make sure that it is held after 6 April, the beginning of the new tax year."

Bah, humbug.

Travelling to work in London at the moment is a hallucinatory experience, what with empty roads, uncrowded tubes and plenty of empty busses whizzing around. The City seems to have taken this recent idea of the two-week holiday over Christmas and new year to heart. Hardly any of the businessmen on the New Years' Honours list were at work. Or to be fair, not in the office, anyway.

Raj Kumar Bagri, CBE, chairman, London Metal Exchange and chairman of brokers MetDist, rang me from Bali to comment on his life peerage.

1996 must surely have been the "annus horribilis" of the LME, I suggested, what with the Hamanaka copper scandal in which a Sumitomo broker was revealed to have run of billions of yen in losses.

Mr Bagri would have none of this: "Sumitomo is not a member of the LME. It is not governed by the rules and regulations of the LME.

"You can ask anyone anywhere - there is no antidote to rogue traders. Look what happened to Daiwa in the US, look at what Nick Leeson did in Singapore.

All we can do is strengthen our regulations and laws. There is nothing markets can do to stop these kinds of forays.

It's up to the companies and their own internal controls. We can't act as policemen in peoples' own offices."

So there we are. As Mr Bagri says himself, he has always been " a very no-nonsense chairman of the LME".

As for his life peerage, he says: "I feel greatly honoured and feel a great deal of humility. This will be a great encouragement to Asian businessmen in the UK and to other ethnic communities. They will see there are no barriers to reaching the top."

As for other businessmen honoured, Bob Horton of Railtrack was "out with relatives - but obviously delighted with his knighthood", a Railtrack spokesman tells me.

No one was in at John Laing, so nobody could comment on chairman John Laing's knighthood. The same goes for the London Docklands Development Corporation, whose chairman John Pickard, a former head of the Sears stores group, also received a knighthood. "No one is in till Thursday," an LDDC security guard informs me.

David Potter, chairman and chief executive, Psion, received a CBE "for services to the manufacturing industry", but when I rang Psion I was told that "nobody's in - although you could contact Mr Potter tomorrow via his secretary".

Meanwhile David Rowland, chairman of Lloyd's of London, heard about his knighthood while on holiday in New Zealand. There again, he has an excellent case for a break, having steered the debt-laden insurance market successfully through its pounds 3.2bn restructuring.

Last but not least, Peter Davis, chief executive of the Prudential, rang me from his home to say how delighted he was at his knighthood for services to training and industry. "I'm just doing the washing up as my wife's got flu," he explained. Bravo.