Your business may have an annual Christmas party for staff, but the tax rules also allow staff parties at other times of the year.
Staff parties which are held at other times of the year can be a tax-free benefit if certain conditions are satisfied.
The exemption applies to an annual party (such as the Christmas party), or similar annual function (such as a summer barbecue), available for all employees. If the employer has multiple locations, the party has to be available to all employees at one location.
If the employer provides two or more annual parties or functions, no tax charge arises, for which cost(s) per head do not exceed £150 in aggregate. For each function the cost per head should be calculated and 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.