Xmas Parties and Tax: What Can Your Business Claim Back

The office Christmas party — the highlight of the year. But when it comes to tax, it’s not all mulled wine and mince pies. Can your business claim back any of the costs?

Let’s clear it up.

1. The £150 Allowance
   HMRC allow you to spend up to £150 per head, per tax year on staff entertainment — tax-free. That covers food, drinks, taxis, even karaoke (if you must).
   
   
2. More Than One Event
   You’re not restricted to just one event. You can have a Christmas do and a summer bash, provided the combined cost per head doesn’t tip over £150.
   
   

👉 Example:

• Summer Party = £70 per person
  
  
• Christmas Do = £75 per person
  
  
• Total = £145 per person ✅ no tax.
  
  

Go a pound over, though, and the exemption disappears completely.

3. Who’s Invited?
   The party has to be open to all employees. Smaller companies usually find this easy — for bigger ones, it means inviting everyone, not just a select department.

Quick Tip
Track costs carefully and keep attendance lists — it’ll save headaches if HMRC ever ask questions.

Yes, you can enjoy both a summer party and a Christmas party — just stay within the £150 limit to keep it tax-free.

Need help navigating the Christmas party tax rules? Book a call with me today, and I’ll guide you through it.

“Celebrate responsibly — both with your team and with HMRC.”