Step into Christmas: Tax Implications of your office Christmas party

The festive season is just around the corner, and it’s time to start planning that unforgettable office Christmas party! Before you dive into the festivities, let’s make sure you’re in the know about the tax implications. With a bit of awareness, you can enjoy the celebrations without any surprises! 

Here is a guide to keeping the holiday spirit bright!

Annual Event Allowance

• Celebrate Together: You can spend up to £150 per head per year (including VAT) on staff parties without worrying about tax, as long as the event is open to all employees.

Key Conditions

• Open to Everyone: Make sure the celebration is available to all staff members, not just select groups.
• Keep It Annual: The event should be a regular occurrence, like a Christmas party, rather than a one-off celebration.
• Cost Control: Ensure that the total cost doesn’t exceed £150 per person, including all food, drink, and entertainment.

VAT Considerations

• Claim Back VAT: You can reclaim VAT on party costs if it’s just for your employees. If you invite clients or suppliers, the reclaimable VAT will only apply to staff expenses.

If you have any questions or need further advice on managing your office Christmas party expenses, don’t hesitate to reach out to us. Let’s make sure your festive celebrations are joyful and tax-efficient!