The run-up to Christmas is traditionally the busiest time of the year for accountancy firms and here at Lewis & Co, we are no exception. While we’ll be celebrating Christmas Jumper Day and enjoying mince pies alongside working our way through tax returns, we anticipate that our team festive celebrations will be happening in the New Year.

Other businesses though are eagerly looking forward to Christmas party season and, after a few quieter years due to the pandemic, will be planning some well-earned company festive celebrations.

If your boss is doing an impression of Ebenezer Scrooge, then maybe point out to them that there are various tax benefits open to employers holding a company party. To qualify for the ‘annual function exemption’, the party or similar social function, must be all the following.

• Cost £150 or less per head (including non-employee guests, such as partners)
• Annual, such as a Christmas party or summer barbecue
• Open to all your employees

If your business has more than one location, an annual event that’s open to all of your staff based at one location still counts as exempt. You can also put on separate parties for different departments, as long as all of your employees can attend one of them.

HMRC will want to see evidence that team members have attended, so it’s important to keep records.

If organising a company Christmas party this year isn’t an option, then employers can send staff a gift up to the value of £50, including VAT, without paying tax on the item. It does have to be a gift though and not cash. It’s worth noting though that any festive wrapping – such as a gift bag and ribbon – should be included within the £50 value.

If you’ve got any festive party questions, do get in touch on: 01892 513515