Christmas Party Tax Allowance

Are you throwing a seasonal Company Christmas Party for your Employees this year? You may be asking yourself whether you can claim for the Christmas Party through your Limited Company.

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 rules

  • The party 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 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

Merry TAXmas!