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A staff summer party can be a tax-free benefit

23rd July 2019

By Lyndsey Hall

Your organisation may have an annual Christmas party for staff, but the tax rules also allow staff parties at other times of the year which are a tax-free benefit, if certain conditions are satisfied.

The exemption applies to an annual party (for example, a Christmas party), or similar annual function (for example, a summer barbecue), provided for employees and is available to all employees or available to all employees at that location, where the employer has more than one location.  If the employer provides two or more annual parties or functions, no tax charge arises in respect of the party, or parties, for which cost(s) per head do not exceed £150 in aggregate.

For each function the cost per head should be calculated. The cost per head of subsequent functions should be added. If the total cost per head goes over £150 then whichever functions best utilise the £150 are exempt, the other is taxable.

A great excuse to celebrate any of the upcoming major sporting events with your team! Hire out a function suite with a big screen and a bar and let your employees enjoy a fun and relaxing afternoon on you, boosting morale and encouraging team-building. And best of all, it’s tax-free!


What sort of staff parties will you book this year? Let us know in the comments, or on our Facebook, Twitter and Linkedin pages. 


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