Christmas Party Allowance HMRC 2024

Christmas Party Allowance HMRC 2024

Introduction

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Christmas Party Allowance HMRC 2024

The HMRC Christmas Party allowance - Unicorn Accounting

Introduction

The Christmas party allowance is a tax exemption that allows employers to give their employees a Christmas party or other festive event without having to pay tax on the cost. The allowance is capped at £150 per head, and it applies to events held between 1 December 2023 and 31 January 2024.

Who is eligible for the Christmas party allowance?

The Christmas party allowance is available to all employers, regardless of their size or sector. It can be used to fund a variety of festive events, including:

  • Christmas parties
  • Office parties
  • Festive lunches or dinners
  • Team-building activities

What are the conditions for the Christmas party allowance?

In order to qualify for the Christmas party allowance, the event must meet the following conditions:

  • It must be open to all employees.
  • It must be held between 1 December 2023 and 31 January 2024.
  • The cost per head must not exceed £150.

How do I claim the Christmas party allowance?

Employers do not need to do anything to claim the Christmas party allowance. HMRC will automatically adjust the employer’s PAYE tax code to take the allowance into account.

What if the cost of the event exceeds £150 per head?

If the cost of the event exceeds £150 per head, the employer will need to pay tax on the excess amount. The tax will be charged at the employer’s usual rate of corporation tax.

Example

An employer holds a Christmas party for its 50 employees. The cost of the party is £7,500. The employer can claim the Christmas party allowance of £150 per head, which means that it will not have to pay tax on £5,000 of the cost. The remaining £2,500 will be subject to corporation tax.

Additional information

The Christmas party allowance is a valuable tax break that can help employers to save money on their festive events. It is important to be aware of the conditions for the allowance and to ensure that your event meets these conditions.

HMRC guidance

For more information on the Christmas party allowance, please refer to HMRC’s guidance:

Disclaimer

This article is for general information purposes only and should not be taken as tax advice. If you have any specific questions about the Christmas party allowance, please consult with a qualified tax advisor.

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