For the cost to be tax-deductible it must be:
- Open to all employees
- An annual event
- Cost less than £150 per head
If your event meets the above criteria then there is no benefit in kind on the Christmas Party/meal and it is allowable for tax.
- The £150.00 includes VAT
- If the cost is £151.00 then all of it is taxed as a benefit in kind
- This is not a licence to put a flat rate of £150.00 through your accounts
- You can have more than one event but the £150.00 is reduced proportionately
- Like all business costs you must have a receipt
- The event must be for all employees and not just directors - except where the director is the only employee
The £150.00 limit is for each employee so no family or friends allowed. However if you are a Director and therefore an employee of your own company then you can have a Christmas meal courtesy of the company.