As Christmas lights go up in town centres and radio stations play Christmas songs 24/7, HMRC have brought some festive cheer of their own to business owners and their employees.
HMRC have now confirmed that exemption rules for staff Christmas parties will also apply to online/virtual events. Therefore, the cost of providing food, entertainment, equipment and other expenses which may be incurred in hosting a virtual event, will all be exempt.
Of course, the other normal conditions of the exemption still apply, so the function must:
- cost £150 or less per head;
- be an annual event e.g. Christmas party;
- be open to all employees.
Some other things you may need to consider in organising an online function in order to qualify for HMRC tax exemption:
- be able to demonstrate attendance – so ensure you keep some sort of record;
- ensure traditional elements of a Christmas party – such as a structured format with food, drink and entertainment – are all present;
- logistics for delivering food and drink may seem like a challenge, but may result in a post-party headache if not carefully considered. Although you could allow a budget for each employee for their own food to reclaim on expenses, it may be harder to demonstrate it being a single annual event.
So, what are you waiting for – send a box of goodies to your staff and find a cringe-worthy bingo caller to boost morale and bring laughter and happiness into your hard-working employee’s homes.
For clarification of the rules for annual party exemptions, you can always call your local AIMS Accountant for advice.