A staff summer party can be a tax-free benefit

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 provided that certain conditions are satisfied.

The exemption applies to an annual party, such as a Christmas party or a similar annual function, for example, a summer barbecue provided for employees.  The event must be open to all employees or open to all employees at a particular location, where the employer has more than one branch or department.

If the employer provides two or more annual parties or functions, no tax charge arises in respect of the party or parties where the cost per head in total does not exceed £150, including VAT. Note that a cost per head for each function 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 others are taxable.

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