November 10, 2021

Zero tax and NI on virtual Christmas parties continues!

Planning a virtual Christmas party this year? Wondering if you’re exempt from paying tax and NI on associated expenses like food, drink or virtual pantomime tickets?

Happily, the HMRC has confirmed that yes, this year the tax and NI exemptions normally applied to the annual Christmas ‘do’ will also apply to virtual Christmas parties, like the year before. Yippee!

To confirm: the scope of section 264 ITEPA03 now also applies to providing food, entertainment and other expenses you might incur when hosting your virtual event.

Of course, the usual conditions of the exemption have to be met. This means your virtual party must be all of the following:

  1. £150 or less per head
  2. Annual, e.g. Christmas party
  3. Open to all employees of a business

Where these conditions are met, you’re not required to report anything to HMRC, or to pay any tax and National Insurance (NI).

Note that this tax and NI exemption is to allow for the cost of provisions that are incurred for the purpose of the event. Plus, the event, along with any associated provision, must be available to employees generally.

What about if our business has more than one Christmas party?

If you want to organise various separate parties e.g. for different office locations or departments, these are still exempt from paying tax and NI – just so long as all of your employees can attend one of them if they wish.

Further guidance available on gov.uk will be updated in due course.

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About the author

Amy Morrison

About the author

Amy Morrison

Amy is responsible for digital content at Moorepay, which includes creating resources for the Knowledge Centre, and making ongoing improvements to the website. With experience in digital marketing, and content and communications, and with a CIPR Certificate in Public Relations, Amy brings a range of skills to her role as Digital Content Manager at Moorepay.

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