Company party: URSSAF, benefits in kind and VAT for an evening on a boat

Booking a boat for a company evening is about more than choosing the date and the menu. HR and accounting teams quickly ask the same questions: is the party a benefit in kind for employees? Can the VAT be recovered? Is there an URSSAF threshold that must not be exceeded? It is far better to answer these questions before the event than during an inspection.

This article is not a substitute for personal advice. It offers a framework, based on generally applied principles, to help you prepare the discussion with your accountant. Our other articles already cover how to read a quote showing prices excluding and including VAT and invoicing for a boat hire: here, the focus is on the social security and tax treatment of a staff or client party.

Staff party: benefit in kind or business expense?

For social security contributions, URSSAF looks at whether the employer is funding a personal benefit for the employee. A company party open to everyone, held on an occasional basis and collective in nature (end of year, company anniversary, celebrating a success) is most often treated with a degree of tolerance: the expense is part of company life rather than additional remuneration.

Things become more complicated when the party is reserved for a handful of people, is held very frequently, or when its cost per head seems disproportionate. It may then be reclassified as a benefit in kind, subject to contributions. The factors that matter in practice are:

• the collective nature: are all the employees concerned invited on the basis of objective criteria?
• the occasional nature of the event;
• the link with the business: team celebration, results, company anniversary;
• the cost per participant, which must remain reasonable in relation to the company's usual practice.

There is no single ceiling that applies to every party. The amounts quoted in official guidance vary according to the type of expense (meal, gift, event) and are revised regularly. Ask your accountant which rule applies to your situation on the date of the party.

URSSAF thresholds: what you can keep in mind, and what you need to check

You will often hear about thresholds expressed as a percentage of the monthly Social Security ceiling. This applies in particular to gifts given on special occasions: a threshold per employee and per event, above which the gifts are added back into the base for contributions. This reasoning applies to gifts, vouchers or keepsakes handed to guests, not to the overall cost of the party.

It is therefore relevant to your evening if you plan to hand out presents on board, for example an end-of-year gift. In that case, add up everything given to each employee during the same year, and keep a record of the amounts. As the Social Security ceiling changes every year, never rely on a figure from an old article: check the current guidance on urssaf.fr or ask your accountant.

VAT: what can you recover on an evening on a boat?

Hiring a boat, with or without catering, includes services that do not all carry the same rate: passenger transport, catering, drinks, venue hire and ancillary services. The quote should itemise them, which makes it easier to analyse the VAT charged. For details of the rates, see our dedicated article on reading a quote.

Deductibility then depends on what the expense is used for. In principle, VAT on entertainment expenses incurred in the interests of the business can be deducted if the invoice is compliant and the expense is justified. Certain exclusions exist, notably for expenses of a personal nature or for goods given free of charge above a unit value set by the tax authorities. Gifts to clients therefore have their own deduction rules.

To limit the risks, make sure that the invoice:

• is issued in the company's name, with the mandatory legal information;
• itemises the services and the VAT rates applied;
• relates to an identifiable event (date, number of participants, purpose).

Clients, partners, spouses: different cases

An evening with clients counts as entertainment expenses, which are treated differently from an internal event. The commercial purpose must be demonstrable: guest list, purpose of the evening and, where relevant, a report. An up-to-date guest list, such as the one you will be preparing anyway for boarding, also serves as supporting evidence.

Spouses, children or friends of invited employees call for particular care: their presence may be seen as a benefit to the employee. Many companies accept this for an occasional festive event, but the matter deserves written confirmation in advance if you plan to open the evening up to loved ones.

If the event is organised by the works council (CSE), other rules apply, linked to social and cultural activities. Our guide to the CSE boat outing covers the organisation from the CSE's side.

Building your file: the HR and accounting checklist

A simple file, put together before and after the party, covers most of the questions an inspector might ask:

• an internal note setting out the purpose of the evening, the target audience and the invitation criteria;
• management approval of the budget;
• the itemised quote and invoice, showing the VAT rates;
• the list of participants: employees, clients and guests;
• a summary of any gifts, by recipient;
• the accountant's written opinion on the treatment adopted.

For an end-of-year party, this file takes half a day to put together. Plan for it as soon as the quote is approved, not after the event: that is when you can still adjust the format, the number of guests or the nature of the gifts.

At Sein'ario, we provide itemised quotes and can adapt the invoicing so that it accurately reflects the services provided. For the final social security and tax treatment, speak to your accountant or, if necessary, URSSAF: every company's situation has its own particularities, and it is for them to validate each point.