The Office Christmas Party
Here at Chippendale and Clark, we usually celebrate the years hard work by letting our hair down, dressing up in our frocks and penguin suits, playing on bumper cars and indulging on a delicious Christmas Dinner cooked for us by the lovely staff at Grittleton House.
As with all other companies, the Christmas Party will be off the cards this year! However, many businesses are holding virtual Christmas parties instead and HMRC have been rather accommodating regarding this.
HMRC permits an exemption of up to £150 per head for the cost of staff events every tax year. Most businesses will use this against the Christmas party, though the exemption can be used for any annual staff functions.
The costs must not exceed £150 per head on average and the event must be open to all employees, e.g. not just for senior staff
There is no taxable benefit for the attending employees so long as the conditions are met.
If the cost exceeds £150, it is all taxable, not just the excess.
HMRC confirmed that virtual parties fall within the scope of the exemption. So if you are holding your annual Christmas party online this year, you will be able to provide food and drink to your employees and take advantage of the £150 per head tax break, as long as the other conditions are met.
If you are supplying your employees with food and drink and are including these receipts within your bookkeeping, please ensure that you write on the top of the receipt ‘Christmas Party’ before you snap them into receipt bank. This is so that our staff know that this food is for business and not personal expenditure.
If you are not a client of Chippendale and Clark and you would like to learn more about using digital software, such as receipt bank, in improving the efficiency of your bookkeeping, please call the office where one of staff will arrange a call back with one of our senior accountants.
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