You might not have to report anything to HM Revenue and Customs (HMRC) or pay tax and National Insurance. To be exempt, the party or similar social function must be all the following:
- £150 or less per head
- annual, such as a Christmas party or summer barbecue
- open to all your employees
Separate locations and departments
If your business has more than one location, an annual event that’s open to all of your staff based at one location still counts as exempt. You can also put on separate parties for different departments, as long as all of your employees can attend one of them.
Multiple annual events costing less than £150 per head combined
As long as the combined cost of the events is no more than £150 per head, they’re still exempt.
Salary sacrifice arrangements
You do have to report how much social functions and parties are worth to each employee if they are a part of a salary sacrifice arrangement.