Virtual Staff Christmas Parties – The tax break

Due to the coronavirus restrictions, many businesses will again choose not to host the usual Christmas Party for employees.

HMRC have are confirm that the annual parties’ exemption will apply to the costs associated with virtual parties in the same way that it would for traditionally held parties.

Therefore, subject to the normal conditions of the exemption being met, the expenses of hosting a virtual event, including providing entertainment, equipment and refreshments principally for enjoyment or consumption by employees during the event, will be exempt.

For annual parties or similar annual events, no liability to income tax arises provided the cost of the annual event does not exceed £150 per head, and that the event is available to employees generally.

Please note that the exemption is not limited to Christmas parties, therefore it will still apply if you decide to postpone your party or function, as long as the function takes place within the current tax year and is within the £150 limit.