Is your company’s Christmas party tax deductible?

The taxman wants you to party

Is your Christmas party tax deductible? Tis the season to be jolly for Limited company owners, according to the taxman! Were you aware there is a little-known exemption from tax for annual staff parties?

Typically associated with the Christmas season, the exemption can in fact apply to one or more events during the year.

The maximum cost per individual attending the party is £150 (including VAT and all incidental costs). To qualify for tax exemption, the event must be open to ALL staff, or to all of those working at a particular location.

Party Hard

Where there are several “events”, the employer can designate which ones should be taken into account to make the best use of the available exemption.

If, for example, the cost per head of event A is £100, event B is £70 and event C is £75, the employer can nominate events B and C as covered by the exemption, assuming all conditions are met. This allows for the best overall tax results.

How to claim back Christmas Party expenses

Knowing and understanding the different tax exemptions available to your business (including your annual staff events) can save your business thousands. The rules for businesses are complex, but HMRC have several reliefs and exemptions available that will help reduce your overall tax liability and assist with the general operation of your business.

If your accountant is not providing these solutions, it’s probably time to switch accountants!

Contact us now for a FREE consultation and speak to an accountant about your business expenses and ensure your business expenses are managed properly.

Have your say, leave a comment…

Your email address will not be published.

City of London

Second Floor,
10 Trinity Square,
London EC3N 4AJ
Phone: 0207 100 1080

Canary Wharf

29th & 37th Floors
One Canada Square,
Canary Wharf, London E14 5AA
Phone: 0207 099 1080


First Floor
81-85 High Street,
Brentwood, Essex CM14 4RR
Phone: 01277 223 278


Chancery Place
50 Brown St
Manchester M2 2JT
Phone: 0161 820 1080

Opening Times

Monday – Saturday
8:00 AM – 6:00 PM