Each financial year HMRC allows you to throw a party for your employees that’s exempt from tax! Naturally, most employers take advantage of this around Christmas – although this could of course be substituted for a summer BBQ or a Garden Party for example.
There is of course a catch – the total cost must not exceed £150 per head (inc VAT) and there’s no exceeding that, not even by 1p otherwise the whole lot will be classed as a benefit in kind. So the trick is either keep the cost per head right down or ensure the total number of attendees brings the average price under the Taxman’s threshold of £150 per head.
If someone drops out (as is often the case) which means you may exceed the threshold, simply invite a stand-in, e.g. an employee’s spouse or partner. As long as the bulk of attendees are staff members, this is perfectly acceptable – see, the Taxman does have a heart!