Many of us have been looking forward to a more traditional end of year season in 2021. While that may not be possible anymore, it’s good to know that if you feel the need to switch your Christmas party plans to virtual this year, the usual tax rules still apply.
The normal rules give room for employers to host an annual event, such as a Christmas party, and be exempt from paying tax on the costs where they do not exceed £150 per head. Items that can be claimed for Christmas parties, include food, drink, entertainment, transport, and accommodation, if an employee needs that to attend.
However, bear in mind, that the cost must not exceed £150 per head. If it does, the entire amount will become taxable. You’ll find full details on the gov.uk website.
In addition, don’t forget about your trivial benefits allowance. Trivial benefits are benefits for your employee that:
- Costs less than £50
- Is not cash or cash voucher (but can be flowers, chocolates, small gifts etc)
- Is not a reward for work or performance
- And is not in the terms of their contract.
- As long as they fit within this criteria, you shouldn’t have to pay tax on them.
Always check with your accountant about your particular circumstances, or contact us for more information.