Accounting for Christmas Parties

What category does staff entertainment come under, specifically “Directors xmas party”

That would go under the category of ‘Staff Welfare’, make sure to clearly annotate on the notes the number of employees attending and that the event is a ‘Christmas Party for Employees Only’.


For the expenditure to be allowable the event must be open only to employees and all employees must be invited, as it is still necessary to establish that the expenditure is wholly and exclusively for the purpose of the business. HMRC also state that If the employer provides one annual function for employees no charge to tax arises on each employee, if the cost of the event per head does not exceed £150.

Two or more functions:

If the employer provides two or more annual parties or functions, no charge arises in respect of the party, or parties, for which cost(s) per head do not exceed £150 in aggregate.

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just wanted to mention the fact of clearly stating number of staff in the party and employees only. A customer did have an inspection once and they did check employees on payroll with number quoted were correct and less than the total per head.

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