Businesses missing out on Christmas party tax break

Many businesses remain unaware of tax exemptions for staff Christmas parties a decade after the rules changed, according to events professionals.

Late Night London corporate party
Late Night London corporate party

Charlie Hepburn, managing director of Vivid Event Group, said the increase in the tax exemption in 2003, from £75 to £150, was still relatively unknown to many companies.

HM Revenue and Customs allows for a tax break for entertaining employees if the get-together is an annual event, such as a Christmas party, that it is open to all staff and that the cost per head per year is not more than £150.

Hepburn said: "We still find that we are having to educate businesses of [Section 264 of the Income Tax Earnings and Pensions Act 2003's] existence. Companies remain unsure of its implications, and how they can use it to their advantage. Once they gain a full understanding of the exemption, they feel confident about factoring it into their annual expenditures."

James Wilkins, joint managing director at Logistik Group, said the tax exemption affects the company’s spending patterns. He said: "As an SME, we are keen to take advantage of the tax exemption for entertaining our employees.

"We must be cautious in our employee entertainment outlay, in the knowledge that if we spend a penny over the limit (including VAT) per head, then the full cost becomes taxable as a benefit-in-kind. If, like Logistik, you have a summer party and a Christmas Party, then the spend starts to get really tight per event."

Emma Howe, Late Night London’s head of corporate, said the company had been responsive to the business-to-business customers keeping to tight budgets for Christmas parties, by heavily investing in its corporate offerings.

She said: "With a limit of £150 annually per head, with some businesses having not one but two events per year to incentivise their staff, it is crucial that our corporate entertainment packages offer the best value and stay within the limits to ensure employers can take full advantage of this tax break."

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Register now
Already registered?
Sign in
IBTM World Trends Watch 2020: 'The changing face of delegates'

IBTM World Trends Watch 2020: 'The changing face of delegates'

Report identifies global MICE trends in areas such as technology, sustainability and incentive travel.

In pictures: Villa Copenhagen opening in 2020

In pictures: Villa Copenhagen opening in 2020

Central post office built in 1912 has been restored to house the new 390-room hotel that can host events for 1,200 attendees.

Strata brings in a dozen new recruits

Strata brings in a dozen new recruits

Agency hires 12 people across all departments, including client services director Laura Awcock.

Our view: Flexible working is key to retaining the best talent

Our view: Flexible working is key to retaining the best talent

C&IT's associate editor Andy McCorkell explains why supporting working parents is so important for a successful business.

In pictures: New events venue opens in Herefordshire

In pictures: New events venue opens in Herefordshire

Crumplebury has onsite accommodation, flexible event spaces, a farm-to-table restaurant and views of the countryside.

6 ways tech can make events more sustainable

6 ways tech can make events more sustainable

Planners can challenge the more wasteful elements of events, says CEO of events management company Eventopedia.

Double sunrise: Would you book a 19-hour flight?

Double sunrise: Would you book a 19-hour flight?

After Qantas trial flight from London to Sydney lands, we ask event planners what they think.

Science Museum unveils new event space within medical exhibit

Science Museum unveils new event space within medical exhibit

Exhibition opens for drinks receptions and events amid one of the world's largest medical galleries as part of £24m refurb.

Venue of the Week: Adare Manor

C&IT's 2019 A-Listers were treated to a stay at the luxury Irish getaway on an 842 acre estate in County Limerick.

7 lessons for event planners from... the John Lewis Christmas ad

7 lessons for event planners from... the John Lewis Christmas ad

Everyone's nightmare is a fire-breathing dragon near a highly flammable Christmas tree, isn't it?

LATEST JOBS