With Christmas 100 days away, the Association of Taxation Technicians (ATT) is saying employers should be able to spend at least £280 per head on festive parties or other annual staff events without triggering a tax charge.
The tax exemption for annual parties and other social functions has been frozen at £150 per head, including VAT, since 6 April 2003. The ATT says that if the limit had kept pace with inflation, it would now be worth £283.
As the festive season approaches, the ATT is urging the Government to increase the exemption. Ahead of Budget, the Association also called for ministers to commit to reviewing it on a regular basis, with the intention of raising it where necessary at least every five years.
ATT’s Jon Stride said: “Christmas parties are a valuable way for employers to thank staff and bring colleagues together, but a tax-free limit fixed in 203 no longer reflects the cost of these events.”
“An employer that goes even slightly above the £150 limit can find that they whole cost become taxable. That is an unnecessarily harsh result, and arises from a threshold that has been frozen for more than two decades.”
