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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

Remember Christmas party tax breaks!

24 November 2015

‘Tis the season to be merry and you may be thinking about planning a Christmas party for your staff to thank them for their hard work and finish the year in good spirits.

The Association of Chartered Certified Accountants (ACCA), has reminded businesses that tax exemptions are available for annual parties. Managers can claim a tax exemption, providing the cost of the event is not valued at more than £150 per person. The cost per head can include accommodation, transport and food and drink – but must not exceed the £150 threshold, even by a penny. Another condition is that the event must be open to all company staff to attend. If the cost per head goes over the £150 limit, the whole cost, not just the amount over £150, becomes a taxable benefit in kind.

Rather than having a Christmas party, you may prefer to hold several events throughout the year, but the total claim for all the events must not exceed this threshold.

If you need to know how to calculate the cost per head, you should divide the total cost of each function by the total number of people (including non-employees) who attend in order to ensure you don’t break the £150 limit.

As is the case with expense claims, you have to hold an event in order to make a claim – you can’t make a cash claim for £150. It’s important, however, to remember that this exemption is not an allowance and should not be treated as such.

The rules around business expenses can be complicated, so don’t hesitate to contact us if you need further clarification.