Sarah Bradford explains how to use tax exemptions to prevent employees from suffering a tax charge on the Christmas party or a Christmas gift.
Many employers will hold a Christmas party for their staff, or give them a Christmas gift. To prevent an unwanted tax charge from arising as well, it is sensible to take account of the available tax exemptions and, where possible, ensure that Christmas events and Christmas gifts meet the associated conditions.
Christmas parties
The tax legislation contains an exemption for annual parties and functions, and while this does not apply exclusively to Christmas parties, it can be utilised to keep the staff Christmas party tax-free.
However, the event must be inclusive, as one of the conditions that must be met for the exemption to apply is that the event is open to all employees or to those at a particular location. This
