It’s that time of year again when businesses all over the UK start to look at the annual event exemption as they plan the budget for their Christmas party. Even if you’re running a small company, you still deserve some festive fun, so in this article we’ll share some ideas for your small company’s “annual event”.
What is the Annual Event Exemption?
Before we look at party ideas for your small team, it’s important to understand what we’re talking about. For the purposes of the exemption, an annual event is defined as a regular event for all company employees to attend, which will be paid for by the company.
It doesn’t necessarily have to be a Christmas party, and there can be more than one event each year.
As long as you spend less than £150 per attendee, the amount you spend is exempt from tax and NI. This is an exemption rather than an allowance, so you should claim the amount you actually spend, and if you spend more than £150 per head, tax is due on the whole amount, not just the over-spend.
Not all “attendees” need to be employees of your company, but all your employees should be invited to attend.
The limit includes all the costs incurred by your limited company for the event, including VAT.
Consider a shared Christmas party
If you share a building or have relationships with other small companies, it might be worth collaborating with them on a joint Christmas party. This may allow you to increase the budget, and create a networking opportunity at the same time.
Hold your party in house
If your budget won’t stretch to a lavish venue, why not hold your party at your office, or even at home? Your team can work together on the catering, decorations and party games to fill your familiar setting with festive cheer, creating a cost-effective and satisfying bonding experience.
Build it around an activity
How do your team feel about bowling, paintball or go-karting? Building your annual event around an activity is a great way to engage your small team and bring them together. Alternatively if you’re looking for a more unique experience you could get a hosting company like The Big Smoke Events to handle it for you.
Go super informal with Christmas drinks
Christmas drinks are a great way to get your team into the Christmas spirit, so to speak. This will give you a much more casual affair, with less pressure to organise an elaborate party. Just make sure to keep the drinking to a responsible level, and time it to minimise the “morning after” effect on your business, for example by holding it on a Friday evening.
Ask your team
The main reason for holding a Christmas party, aside from taking advantage of the annual event exemption, is to reward your team and bring them together, so it makes sense to ask them what they’d like to do. Holding a group brainstorming session with the whole team could highlight some ideas would never have thought of, as well as giving you an opportunity to learn about your employees.
If you have questions of if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.