Claiming your company holiday party for tax relief

The holiday season delivers festive fun for staff bonding and celebrating successes from the past year. For small business owners, throwing a holiday party also offers the potential benefit of a legitimate tax deduction. With intentional planning around HMRC guidelines, your company’s annual festive gathering can qualify as a deductible business expense.

What the Rules Require

For your company party to qualify for tax relief, it must satisfy several key criteria outlined by HMRC:

• Costs are kept under £150 per individual
• All staff members are included on the guest list
• It is an annual (not more frequent) event
• Any taxable benefits are reported to applicable employees

Provided these stipulations are met, the full costs of the event can be claimed as a business expense deduction.

Guest List

Fortunately, there’s no limit on invitees, so feel free to include partners and families. Just stick to that £150 per head limit.

It’s Not an Allowance

This tax exemption for staff parties comes with an important caveat – it’s not an allowance where you can overspend a bit. Even one penny over £150 per attendee will forfeit the entire event’s tax-exempt status. Therefore, tally costs before committing and leave wiggle room for unexpected last-minute expenses.

Disclaimer. This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.