HMRC Christmas Party Allowance 2018

If you are throwing Company Christmas Party then its worth making yourself aware of the HMRC Christmas Party Allowance.  It may well affect what you plan!

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. However, there are some obligations and tax rules associated with the any annual party.

HMRC highlights what your Staff Christmas Party can (and cannot) entail. Play by the rules and your business will successfully qualify to expense the festive feast for this year and years to come (so long as the rules don’t change).


The HMRC Christmas Party Allowance 2018

  • The party must be an annual event, not just a one-off;
  • There’s (up to) a £150 per head Annual 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 party 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!
  • 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 party-related items such as travel, venue, food and drink.

Next: How to Give Your Staff Tax Free Christmas Gifts


About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek and money nerd helping financial DIY-ers organise their money so they can hit their goals quicker.

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