Claiming VAT on Staff Christmas Parties

Updated 18 August 2021

Find out how to claim back VAT on staff Christmas parties, the limits you need to stick to and the records you need to keep.

Can You Claim Back VAT on Staff Christmas Parties?

You can claim back VAT on your staff Christmas parties if your business is registered for VAT. However, HMRC specifically states this rule is for employees only, so you’ll also need to be registered as an employer with these members of your team being on your payroll. That means any VAT associated with the cost of the Christmas Party for employees partners, freelancers, clients and former employees must be excluded from the VAT claim.

If the Christmas Party is just for Directors, Partners or Proprietors, then no VAT can be reclaimed on the cost of the party. It must be available to all.

Keeping a Record of VAT You Claim Back on a Staff Christmas Party

As with any other business expense, you are required by HMRC to keep appropriate records and receipts to support any VAT being claimed back on expenses. You’ll need to keep receipts in relation to your staff christmas party along with any calculations you’ve made to apportion any VAT you have excluded for non-employees.

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About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - a website full of templates, guides and resources for UK sole traders. No faff. No confusion. Just simple straightforward advice on business registration, taxes and bookkeeping.