Claiming Expenses for a Company Christmas Party
Posted on 24th November 2020 at 15:00
It’s almost that time of year when staff come together to celebrate the festive period. If you own a company, you can claim certain activity as expenses, which will help to reduce your costs and maintain healthy cash flow.
Normally, Christmas parties take place in a venue such as a bar, restaurant or hotel. When this is the case, the company can claim up to £150 per attendee as an expense, providing the following criteria are met:
Not all guests have to be employees, but every employee must be invited
You can only claim the amount you actually spend, up to a maximum of £150 per head
All of the costs incurred need to be included, as well as VAT
If you go over £150 per head, you have to pay tax on the whole amount rather than just the overspend, so stay within the threshold!
This year, many companies are choosing to hold their Christmas parties online. For instance, some bands, comedians and theatre companies are offering virtual packages that include games and live entertainment. Some companies are even putting together food and drinks packages or ordering pre-packed hampers to send to staff in place of the traditional bar tab.
If this is the case, you can still claim up to £150 per head in company expenses as long as you:
Prove how many guests attended (such as using data to show attendance)
Provide food and drink through the company (if applicable), rather than allowing staff to reclaim costs themselves
Need more advice or an experienced accountant to manage your tax for you? Call our Yorkshire office on 01482 235575, our London office on 0207 885 0605, or fill in our contact form.
Tagged as: Tax
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