As a limited company owner, you can receive favourable tax treatment on your annual Christmas party. This means that the cost of the party can be recorded as a company expense, and as such, is excluded from your annual profit, which decreases the amount of corporation tax you will pay at the end of the tax year.HMRC have a few rules that stipulate what a Christmas party can entail and how much is tax deductible. Providing you meet these, you’ll qualify for a rather jolly festive soiree, complete with a juicy tax exemption. The rules
- The party has to be an annual event and not just a one-off shin-dig – a regular Christmas party or Halloween spookfest, for example.
- You can, however, split the allowance into multiple events, so long as you don’t exceed the £150 total limit. For example, you may wish to have an annual summer BBQ where you spend £60 per head and a Christmas party where you spend £80 per head.
- Must cost no more than £150 per head – this includes all party-related things such as travel, food, drinks and venue.
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