Happy Christmas from the Tax Man
I am sure you already know this – but just in case – HMRC allows companies to spend £150 per head per year on staff parties, tax-free for the employees. This total should not only cover food and drink, but also accommodation and transport if the employer pays for these, plus VAT, divided by the total number of guests. The number of guests should include non-employees.
A few important points to remember:
- The limit applies for a tax year, so if you give a Summer and a Christmas party that together cost less than £150 per head, both will be tax free for employees
- The £150 is per head not per employee – which helps if partners are invited
- But the £150 is the total cost including not only food and drink but also travel and accommodation.
Date: 19th December, 2007
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