ICAEW shares tips for arranging a tax-efficient seasonal party

An end of year party can often prove to be an enjoyable way to celebrate the festive period with work colleagues.

08 Dec 2017

An end of year party can often prove to be an enjoyable way to celebrate the festive period with work colleagues. With this in mind, the Institute of Chartered Accountants in England and Wales (ICAEW) has advised businesses to ensure that their party is as tax-efficient as possible.

An annual staff party could qualify as a tax-free benefit for employees, provided certain conditions are met.

In order for a party to qualify, the total cost per head must not exceed £150 (including VAT, transport and accommodation). An event which exceeds the cost per head limit will be liable for income tax and national insurance.

In addition, the event must be held primarily for the purpose of entertaining staff, and the party must generally be open to all employees based in that location (separate departmental or divisional parties are permissible).

Commenting on tax-efficient seasonal parties, Sarah Ghaffari, Technical Manager of SME Business Tax at the ICAEW, said: ‘A Christmas party is a great way to reward staff for hard work, and as a little festive gift, HMRC allow up to £150 spend per employee, completely tax-free.

‘The Christmas tax exemption can be enjoyed by businesses of any size, so long as it’s within the £150 budget.’

Try a site search

About us

Ling Phipp was founded in 1974 and nowadays has two partners, six managers plus trainees and support staff.

We serve clients in the East Midlands and all over the UK. Our out-of-town location, with easy parking, close to the M1 junction 25 (Nottingham/Derby - A52), is very convenient.

Company details

0115 949 6838

Ling Phipp, Cliffe Hill House, 22-26 Nottingham Road, Stapleford, Nottingham NG9 8AA


© 2018 Ling Phipp. All rights reserved. We use cookies on this website, you can find more information about cookies here.

Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk, under reference number 6424855. This is the firm number provided by the Institute of Chartered Accountants in England and Wales.