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It’s that time of year again, office Christmas party season! Love them or hate them, the office Christmas party has become a staple of the corporate calendar – and this time of year our accountants field questions left and right on what can be claimed tax-free for the annual festive knees-up.
HMRC allow an exemption from tax, National Insurance Contributions and reporting if your Christmas party (or “annual party”, to put it in the taxman’s terms):
It’s important to note that the £150 figure cannot be applied to events over and above this cost – it’s an exemption, not an allowance. If your Christmas party costs £500 per head you cannot offset the first £150.
You can also only use the exemption once per tax year up to its maximum value. This means if you already held a Halloween party which cost £100 per head, and your Christmas party will cost £75 per head you will not be able to waive any tax or NIC’s for your Christmas party, as the combined total is over the £150 figure.
Conversely, if you are holding two parties this year costing £70 per head each, you can claim the full amount as the combined total is below £150.
You can also claim a £150 exemption for any family members who attend your party – so if it’s just yourself and your partner you can go crazy to the tune of £300 tax-free.
If you have any questions don’t hesitate to get in touch with your Account Manager – and don’t forget to have a fantastic Christmas party.
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