{"id":30306,"date":"2023-12-04T10:52:39","date_gmt":"2023-12-04T10:52:39","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=30306"},"modified":"2025-09-15T16:12:09","modified_gmt":"2025-09-15T15:12:09","slug":"is-your-companys-christmas-party-tax-free","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/blog\/is-your-companys-christmas-party-tax-free\/","title":{"rendered":"Is your company\u2019s Christmas party tax-free?"},"content":{"rendered":"\n<p>Who would have thought that <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/hmrc\/\">HMRC<\/a> is <em>all for<\/em> champagne, confessions and co-workers? \ud83e\udee3Certainly not us!&nbsp;<\/p>\n\n\n\n<p>But, before you spread the goss, let us clarify &#8211; we\u2019re talking about your company\u2019s Christmas party.&nbsp;<\/p>\n\n\n\n<p>We know, we know, our revelation isn\u2019t as scandalous as you first thought. But it\u2019s nonetheless full of surprises!&nbsp;<\/p>\n\n\n\n<p>The first one being, did you know there\u2019s a <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/tax\/\">tax<\/a> exemption for your company&#8217;s Christmas party? \ud83c\udf84<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Have yourself a very merry Christmas (party) \ud83c\udfb6<\/h2>\n\n\n\n<p>To qualify for the tax exemption, your company\u2019s Christmas party must meet all of the following requirements:&nbsp;<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-yellow m-align-left\">\n    <div class=\"b-block-body\">\n        <ul>\n<li>It\u2019s annual &#8211; the event happens or should happen every year\u00a0 \ud83d\udcc5<\/li>\n<li>It\u2019s open to all employees based at one location &#8211; it might seem like a \u2018morals thing\u2019 but it is, in fact, an official rule!<\/li>\n<li>The cost does not exceed \u00a3150 per head (inclusive of VAT)<\/li>\n<\/ul>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<p>If you\u2019re not sure what this means for your next company Christmas party, fear not! We\u2019re going to break down all the rules and regulations \ud83d\udcaa<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">It\u2019s the most wonderful time of the year&nbsp;<\/h2>\n\n\n\n<p>Your company Christmas party must be annual. But, is this as self-explanatory as it sounds?&nbsp;<\/p>\n\n\n\n<p>An annual event is something which happens or should happen once a year. Our prime example? A company Christmas party!&nbsp;<\/p>\n\n\n\n<p>Most businesses provide one for their staff annually &#8211; except some are definitely better than others \ud83d\ude09(sorry not sorry).&nbsp;&nbsp;<\/p>\n\n\n\n<p>By contrast, a one-off event which does not happen once a year, such as a retirement party, would not qualify for the tax exemption \ud83d\ude22<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">All I want for christmas is \u00a3150 tax-free boogie \ud83d\udd7a<\/h2>\n\n\n\n<p>\u00a3150 sounds great, right? And it is! But, we\u2019d recommend that you take a few notes before you splash your company\u2019s cash \u270f\ufe0f<\/p>\n\n\n\n<p>For the Christmas party to qualify as a non-taxable benefit, the cost must not exceed \u00a3150 per head.<\/p>\n\n\n\n<p>It is calculated by adding up the total cost of the event and dividing it by the total number of attendees.<\/p>\n\n\n\n<p>In other words, you might want to consider budgeting before you buy \u2026 \ud83d\udcb8<\/p>\n\n\n\n<p>It\u2019s also important to remember that the limit of \u00a3150 per head applies to all those attending the function, not just employees \ud83d\udc6d<\/p>\n\n\n\n<p>So, if employees bring guests, the total cost should be divided by the total number of employees and guests.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Deck the halls with boughs of holly<\/h2>\n\n\n\n<p>Yep, that\u2019s right, deck out your party venue with all the decorations you can get your party planning hands on!&nbsp;<\/p>\n\n\n\n<p>All and any of the costs for putting on your Christmas party are included in the \u00a3150 per-head calculation! From setting up to cleaning up and everything in between:&nbsp;<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-purple m-align-left\">\n    <div class=\"b-block-body\">\n        <p><span style=\"font-weight: 400;\">Here are a few more examples: <\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Accommodation \ud83c\udfe8<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Travel\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Food \ud83c\udf54<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Drink<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Entertainment \ud83e\udea9<br \/>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h2 class=\"wp-block-heading\">The more the merrier? \ud83e\udd14<\/h2>\n\n\n\n<p>It\u2019s a phrase we often hear during the festive period. But, it should not always be taken literally \ud83e\udee0<\/p>\n\n\n\n<p>Take HMRC for example. They are not in favour of more than one tax-free annual event.&nbsp;<\/p>\n\n\n\n<p>We\u2019re afraid it\u2019s true. The \u00a3150 per head is for the entire year, not per event.&nbsp;&nbsp;<\/p>\n\n\n\n<p>But, don\u2019t worry! If you hold more than one annual party in a year, you can split your \u00a3150 exemption over several events \ud83c\udf89<\/p>\n\n\n\n<p>For example, if you had three allowable events you could spend \u00a350 per head on the first event, \u00a350 on the second event and the final \u00a350 on the Christmas party.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">I\u2019m dreaming of a \u2026 loophole!?&nbsp; <strong><br><\/strong><\/h2>\n\n\n\n<p>Think you\u2019ve found a loophole? We hate to be the bearer of bad news but unfortunately, HMRC are <em>always<\/em> one step ahead.&nbsp;<\/p>\n\n\n\n<p>For example, you may have considered contributing to your Christmas party to reduce the per-head cost. But, that won\u2019t work on HMRC\u2019s watch \ud83d\udc40<\/p>\n\n\n\n<p>You\u2019ll also want to take extra care to remember this:&nbsp;<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-mint m-align-left\">\n    <div class=\"b-block-body\">\n        <ul>\n<li>The \u00a3150 is not an allowance<\/li>\n<li>If the per-head calculation exceeds \u00a3150 then the full amount of the Christmas party is chargeable to staff as a taxable benefit \ud83d\udcb3<\/li>\n<li>E.g. If the event was just \u00a31 over (\u00a3151 per head) then the full amount is a taxable benefit \ud83d\ude33<\/li>\n<\/ul>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h2 class=\"wp-block-heading\">And the bells are ringing out for HMRC&nbsp;<\/h2>\n\n\n\n<p>Before we send you on your way, there\u2019s one teeny tiny detail you must not miss\u2026&nbsp;<\/p>\n\n\n\n<p>Reporting your Christmas Party to HMRC.&nbsp;<\/p>\n\n\n\n<p>The good news is that annual events that meet the tax-free requirements don\u2019t need to be reported. Your company should simply keep their paperwork for proof of exemption if needed later on.&nbsp;<\/p>\n\n\n\n<p>If your party planner has too much fun, and the cost per head exceeds \u00a3150, your company must report a benefit for each staff member.\u00a0They can do this on a <a href=\"https:\/\/www.gov.uk\/paye-forms-p45-p60-p11d\/p11d\">P11D<\/a> &#8211; but your presence at the party might just land you a present from HMRC\u2026 \ud83c\udf81<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Who would have thought that HMRC is all for champagne, confessions and co-workers? \ud83e\udee3Certainly not us!&nbsp; But, before you spread the goss, let us clarify &#8211; we\u2019re talking about your company\u2019s Christmas party.&nbsp; We know, we know, our revelation isn\u2019t as scandalous as you first thought. But it\u2019s nonetheless full of surprises!&nbsp; The first one [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":41804,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[299],"tags":[416,356,102],"class_list":["post-30306","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-benefits-reliefs-grants","tag-expenses","tag-hmrc"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is your company\u2019s Christmas party tax-free? &#8211; Taxfix (formerly TaxScouts)<\/title>\n<meta name=\"description\" content=\"Did you know there\u2019s a tax exemption for your company&#039;s Christmas party? To qualify, your company\u2019s party must meet a set of requirements.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/taxfix.com\/en-uk\/blog\/is-your-companys-christmas-party-tax-free\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is your company\u2019s Christmas party tax-free? &#8211; Taxfix (formerly TaxScouts)\" \/>\n<meta property=\"og:description\" content=\"Did you know there\u2019s a tax exemption for your company&#039;s Christmas party? 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