Having a Christmas Party? 🎄

Now that the Christmas party season is upon us, here is a summary on what is a taxable deduction 🌟

The cost of the function must be less than £150 including VAT per head.

🛑 Be careful, if the cost of providing the party (room hire/food/travel) exceeds that amount, the whole amount is taxable!

If you have more than one party over the year, the amount per head is combined, which may lead to one event being fully taxable.

To get the tax relief;

👉 All staff are invited;

👉 No relief for director only parties excluding employees unless the only employees are the directors;

👉 You can invite other guests but the main purpose is for staff entertainment.

You can claim VAT where the purpose of the event is for staff welfare.

Note! HMRC may decide to block any claims where they think it is client entertaining and there can be penalties imposed where they believe you have been careless and tax should be due.