It’s that time of year again, mulled wine, mince pies, Christmas jumpers and parties! Are you thinking about hosting an office Christmas party this year? Well, you’ll be pleased to know that the Taxman is not immune to the spirit of Christmas and you might be able to record it as a company expense.
As always, there are a few rules and regulations that you might want to take into consideration before you book a night at The Ritz and crack open the Moet!
The Party Rules
- It must be an annual event, not just a one-off;
- There’s (up to) a £150 per head annual Christmas Party Allowance. You’ll be pleased to know that this can be split across multiple annual events. For example: £50 per head for a summer BBQ and £100 per head for the Christmas Party;
- But watch out – if the bill comes to £151, the full amount becomes a taxable benefit not just the extra £1! So, lets pretend you host a summer BBQ that costs £50 per head and then have a Christmas party that costs £110 per head. Since the total is over £150 then one of the functions will be taxable on the employee. The employer can chose whichever event best utilises the £150 exemption. In this case it would be better to apply the £150 exemption to the Christmas party. The BBQ event would therefore be fully taxable. The actual order of the events is irrelevant so long as they are in the same tax year.
- The annual Christmas Party must be open to all employees. If your business has multiple locations, an annual event open to all staff at one location still counts as exempt.
- The exemption includes all related items such as travel, venue, food and drink.
So, enjoy the festivities and if you have any questions give us a call on 01332 292022 or drop us an e-mail to firstname.lastname@example.org