ICAEW urges employers to consider the tax implications of a seasonal party

04 Dec 2018

The Institute of Chartered Accountants in England and Wales (ICAEW) has urged employers to consider the tax implications associated with a seasonal party.

A company end of year party can be a great way to celebrate the festive period, as well as employees' hard work. However, there are certain conditions to consider in order to ensure the event is as tax-efficient as possible.

The total cost per employee must not exceed £150 (including VAT, accommodation and transport). This also includes the costs for employees' guests, if they are invited.

If the party does cost more than £150 per employee, the full amount spent on the event will be liable to income tax and national insurance. The seasonal party must also be open to all employees based in that location (separate departmental parties are permissible).

The party must be an annual event: however, if you have more than one annual event (for example, a seasonal party and a summer party), the cumulative total must be £150 or less per employee.

The ICAEW added that, in regard to gifts for employees, only those deemed 'trivial' are exempt from tax.

Southampton Office

12-14 Carlton Place
Southampton
Hampshire
SO15 2EA

Tel: 02380 234 222

Winchester Office

6 Charlecote Mews
Staple Gardens
Winchester
SO23 8SR

Tel: 01962 842000

Reading Office

3 Richfield Place
Richfield Avenue
Reading, Berkshire
RG1 8EQ

Tel: 0118 9511 115

London Office

90 Long Acre
Covent Garden
London
WC2E 9RZ

Tel: 0203 470 0777