Can you claim back VAT on a staff Christmas party?

Written by Bella Jolly, Mon 2 October 2023

If you or your team are getting a head start on planning the Christmas party, there are a whole host of things to consider, from venue to menu - and each of them throws up a new stream of questions. The one on everybody’s lips this festive season: can you claim VAT back on a work Christmas party? 

Entertaining your staff is tax deductible - but there are some rules and regulations you’ll need to be aware of when planning your Christmas party. 

First of all, it’s worth noting that staff perks are not tax deductible, which means there are a few things to be aware of to keep your party exempt from benefit-in-kind tax. Your event must:

  • Cost £150 per head or less - note that this is not per event, but for all annual functions

  • Be an annual event, like Christmas party or a summer gathering, rather than regular entertaining over the course of a year 

  • Be open to all employees - it is of course not mandatory for everybody to attend, but everybody must be at least invited

One final - and crucial - point to note is that you can only claim back VAT for a staff Christmas party that is specifically for your team members. If your party is really to celebrate with and entertain customers or clients, with your staff there too, you will not be able to claim back your tax. 

N.B. Whilst we believe the information contained here is correct, we are not tax advisors and you should take professional tax advice specific to your circumstances.