Okay, it’s October, the leaves are turning, and the festive menus are officially out! That means we can finally talk about Christmas without anyone complaining it’s too early.
As a business owner, the pressure is on to book that perfect Christmas do before all the good spots are taken.
But before you put down a deposit, let’s make sure your festive fun is tax-deductible!
Yes, you can treat your team, but to keep HMRC happy, your annual party must meet certain conditions!
What are HMRC’s rules?
🐷 The cost per person must not exceed £150 (including VAT). Go a penny over, and the whole amount becomes not tax deductible, not just the bit over the limit!
🐷 This can include your employees’ partners. The £150 limit is per head, not per employee.
🐷 The event must be open to all staff (though it’s up to them if they want to come and show off their dance moves).
🐷 This is an annual allowance. If you had a summer BBQ (or other event), the combined cost of all events per head must stay under the £150 threshold for the year.
So there you have it. Go forth and book that party, safe in the knowledge it’s a legitimate business expense.
And for all you sole directors out there… the good news is you can treat your spouse or partner to a festive outing on the company, giving you a budget of up to £300 (inc. VAT) for the two of you 😉
Happy partying!
Just a quick note: This advice is for directors of UK Limited Companies. This doesn’t apply to Sole Traders!
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