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Is the Christmas party tax deductible?

With Christmas just around the corner parties have been booked and everyone is looking forward to some festive cheer. Found out how you can entertain your employees and make the Christmas party tax deductible when it comes to your accounts.

You can claim for an annual party (it doesn’t have to be a Christmas party but must be an annual event). The cost is limited to £150 (including VAT) per employee or director. Be careful not to go over  the £150 limit as if it works out to be even a penny over, the full amount becomes subject to tax and national insurance (NI).

If your spouse or civil partner attends as your guest, that can be claimed too as long as you don’t exceed the £150 limit. The event must be open to all employees of your business. Keep in mind that this is an expense not a flat rate allowance, so keep the receipts and only claim what you have spent.

What about Christmas gifts for clients? The rules are strict here, and in general the answer is no. The exception to this is for gifts that bear a conspicuous advert for your business and are not:
– Food, drink, tobacco or vouchers
– The cost of the gift does not exceed £50

Contact  CWR for all your financial queries. We’d love to hear from you.

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