Is my Christmas Party tax deductible?

We hate to talk about it so far from the day itself but we also like to be super organised and these things need planning! We don’t want to speak too soon but it’s looking like Christmas Parties could make a return this year – let’s assume for the purposes of this blog that things remain so we can celebrate this year, so the big question we’re covering here is:

The good news is that yes, it will be tax deductible, but like everything, there’s some conditions.

First off, you’ve got to invite everyone. Any event must be open to all staff, but it’s then up to them if they attend or not, as long as you’ve given them the chance to come then you’ve ticked this box.

You mustn’t spend more than £150 per person. This includes VAT and is a hard and fast rule, spend £150.01 and NONE of it counts, so keep to that budget!

You can invite partners of your employees, again as long as the amount per person is not over the budget.

The £150 isn’t just for Christmas, it’s the budget for the whole year, so if you’ve had a summer BBQ too then that’s coming out of the same allowance.

Single director limited compnay? Take the other half out for a Christmas outing and allow (up to!) £300 (inc VAT) for the pair of you.

Not so good for the sole traders, anything you spend on yourself (or your partner) for something like this would just count as drawings.

One important rule to note with the current climate is that this all applies to online/virtual parties too.

So there you go, all the rules for a fun, tax deductible, party. Don’t forget to invite your bookkeeper & accountant!

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