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Christmas Party Expenses

12/12/18 | Advice & Guidance, Business, Expenses

It’s the time of year to dust off your best outfit and get ready for your Christmas party. They’re a great way of rewarding yourself and your employees for a year of hard work, but what are you able to claim once all the fun is over?

There are some real incentives provided by HMRC for limited companies to throw a Christmas party for their employees (unfortunately, these don’t apply to sole traders).

However, there are some strict rules that apply to make your parties exempt from tax and National Insurance, including;

  • The party must be open to all of your employees
  • It cannot cost more than £150 per person (including VAT)
  • Shareholders are not included in the exemption unless employees or directors of the company
  • The party must be an annual event


There are some other things to remember when claiming for your company Christmas party.

  • You can claim an additional £150 per person for any plus ones of your employees (providing they are a family member or partner)
  • This exemption includes all annual events over the year. All combined costs of parties must not exceed £150
  • If your party costs £151 (or more) per person, you won’t be able to claim the first £150 as a business expense – the whole thing will be taxed as normal

As a client of Sidekick, all you need to do is record the cost of the party as a Staff Benefit Expense, upload any receipts or invoices, and we will take care of the rest!

Contact us today to get started.


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