Posted December 4, 2015

Parties for Employees

It’s December, which means one thing – Christmas party season! We thought it would be a good idea to remind our readers of the tax implications of hosting a staff Christmas party.  It is estimated that British businesses will spend nearly £1bn on festive events this year.

Approximately 72% of businesses intend to hold a party with an average spend of £42.48 per employee.

Holding a party for your employees is a great way to boost morale and thank them for the hard work they have done over the last year.

But what about the tax consequences? Is it a perk of the job for employees or will they have to pay tax on a “benefit”?

Generally, as long as the total cost of all employee functions in a tax year are less than £150 per attendee (including VAT) there will be no implications for the employees themselves. When considering this limit make sure you have included all of the costs such as transport, entertainment, accommodation as well as food and drinks.

If the costs are above £150 then the full cost will be taxable on the employee.

The information contained above is provided for information purposes only and is not intended to amount to advice on which reliance should be placed. We therefore disclaim all liability and responsibility arising from any reliance placed on such information. Professional advice should be obtained before taking or refraining from taking any action as a result of the above contents.