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December 2024 | Understanding Tax Rules for Your Christmas Party

Every year, businesses can take advantage of certain tax exemptions when planning their Christmas parties. Reviewing these ahead of the festive season could help your company save money. To qualify for the exemption, the event must be open to all employees, occur annually-such as a Christmas party or summer barbecue-and cost no more than £150 per person. These rules apply equally to in-person and virtual events.

You can put on more than one party in various locations if your business is spread across the country, provided every employee is able to attend one of them. You can also have more than one party a year, providing that the combined cost of them all is less than £150 per employee.

WHEN MIGHT THE COMPANY NEED TO PAY?

If the company events aren't exempt, or you have used up the £150 per employee allocation earlier in the year, then you may need to report the value of the party on each employee's P11D form and pay NICs on the value of it.

If the party is part of a salary sacrifice arrangement, and the party's value is less than the amount of the salary given up, then you would need to report the value of the salary instead. You can find out more information on Gov.uk.

LET US HELP YOU

If your business is planning a Christmas party then, please get in touch with us on 01709 327 215 or email info@branagans.co.uk and we will be happy to offer you the help and guidance you need.

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