Staff Parties A Tax-Free Benefit

 Staff parties qualify as tax-free benefits for employees providing certain conditions are met:

• The total cost must not be greater than £150 per head, per year.
• £150 must include VAT, accommodation and transport.
• £150 is not an allowance: if the costs come to £152, the whole benefit is taxable.
• The event must be for entertaining staff.
• The event must be open to all members of staff not just directors.
• You can claim back input VAT but this may be restricted where you are also entertaining customers.