November 30, 2020

Zero Tax and NI on Virtual Christmas Parties!

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 this year – yes – the tax and NI exemptions normally applied to the annual Christmas ‘do’ will also apply to virtual Christmas parties. 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.

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 Moorepay’s customer communications as well as producing both legislative and topical content for the monthly newsletter and the website knowledge centre. With experience in digital marketing, communications and HR, Amy brings a range of skills to her role as Content & Communications Manager at Moorepay.

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