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HMRC Confirms Virtual Christmas Party Exemption

Virtual Christmas parties will be eligible for the annual function exemption.

Section 264 of ITEPA 2003 allows an exemption where an employer hosts an annual event. This doesn’t have to be at Christmas, it could be held at any time of the year, the key here is that it is an annual event and is made available to all employees, or all in a particular location where an employer has more than one location, at a cost of less than £150 per head.

All costs of providing the event must be counted when calculating the ‘per head’ cost. This could include:

  • Entertainment
  • Food and drink
  • Transport and accommodation that enables an employee to attend
  • VAT

This list isn’t exclusive, and in arriving at the ‘cost per head’ the total expenses should be divided by the number attending, which may also include non-employees.

Read more via Accounting Web: https://www.accountingweb.co.uk/tax/business-tax/hmrc-confirms-virtual-christmas-party-exemption