Resources

Christmas party with a gift of tax breaks

Blog
Christmas party with a gift of tax breaks

Yes, it’s that time of year again! Christmas is on the horizon, and the office Christmas party planning will be in full swing for many companies across the UK. So, if you are planning a shindig for your employees, you should maximise the tax breaks available from HMRC, and make sure you don’t fall foul of the rules and fail to pay what could be due to the taxman.

If you want to have a party that can benefit from tax breaks, then there are a few rules you need to follow. The party needs to cost less than £150 per head – providing you haven’t had any other parties during the same tax year. The exemption of £150 per person applies across the year, so if you have had a summer barbeque for example, which cost £60 a head, then you only have £90 per person left to spend on the Christmas party.

The party must be open to all

The parties must be annual – like the Christmas party – and must be open to all employees, otherwise they will not be considered exempt by HMRC.

If you happen to have various offices around the UK, then it is fine to have different parties in different places, as long as all members of staff are able to attend one of them. If this is the case, then you will still benefit from the tax exemption.

One other thing to consider is that if you have staff who are on Salary Sacrifice arrangements within your business, then you need to inform them of how much each social occasion is worth to comply with the rules.

Remember, if any of the events you have put on for staff throughout the year don’t count as being exempt, then you must report all costs to HMRC and you will be liable for National Insurance payments on those amounts.

Each employee will need to have the cost reported to them on their P11D form, and the employer will need to pay Class 1A NICs on the amounts. 

You can find out more about your obligations on the Gov.uk website, which is the best way to ensure you don’t end up with a financial hangover.

Let us help you

If you want to know what you can and can’t do in terms of the cost of your Christmas party, then please get in touch and we will be happy to offer you the help and guidance you need.

To book in a FREE consultation, contact us today on 0161 669 4221 or info@biaccountancy.com.

Stay up to date on what’s new at Bright Ideas.

    Step 1 of 3

    Thanks for choosing Bright Ideas!

    Let’s get started with a few details…

    (*) Required field
    The field is required
    The field is required
    Email address is invalid
    The field is required
    By submitting you agree to our Privacy Policy

    How can we help?

    I need accounting support for…

    (*) Required field
    The field is required
    The field is required
    The field is required
    The field is required
    The field is required
    £The field is required
    The field is required
    The field is required

    When’s good for you?

    Pick a slot…

    (*) Required field
    The field is required
    The field is required
    The field is required
    BACKLet's get started
    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

      Step 1 of 2

      Become a client

      Let Bright Ideas take care of your accounting. We’re guaranteed to have a solution here that suits your needs. Simply pick the package you like best and we’ll take care of the rest.

      You can sign up for our services right now. Complete the form below and we’ll be in touch the same day (if received before 4pm).

      (*) Required field
      The field is required
      The field is required
      The field is required
      The field is required
      Email address is invalid
      The field is required
      The field is required
      The field is required
      The field is required
      By submitting you agree to our Privacy Policy

      Let’s talk about your business

      Setting up a new business? Already trading as a Limited Company? No matter what your circumstances, Bright Ideas can help.

      (*) Required field
      The field is required
      The field is required
      The field is required
      The field is required

      Included in our company formation service is:

      • Limited Company name of your choice
      • Memorandum and articles of association
      • VAT, PAYE and Corporation Tax registration
      • Certificate of incorporation and Share certificate
      • Companies house registration
      (*) Required field
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required

      Director/Shareholder

      (*) Required field
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required

      Additional director or shareholder (Should only be completed for an additional person)

      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required
      The field is required

      Declaration acceptance *

      The field is required
      The field is required
      BACKLet's get started
      This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

         

        Request a Call Back

        (*) Required field
        The field is required
        The field is required
        Email address is invalid
        The field is required
        By submitting you agree to our Privacy Policy
        This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.