🎄 How to Thank Your Team (or Yourself!) This Christmas – Without Paying Extra Tax

With Christmas creeping up (again!), it’s the season of mulled wine, mince pies… and showing a bit of love to your team 🎁

Whether you’re planning a festive get-together or just want to give a thoughtful gift, the good news is — you can do it tax-free. Yes, HMRC actually encourages a bit of seasonal cheer (as long as you follow a few simple rules).

So here’s what you need to know to treat your team — or yourself — without triggering a tax bill 👇

🥂 1. Staff Parties & Annual Events — The £150 Per Head Rule

HMRC lets you throw an annual party (hello Christmas do!) as a tax-free benefit if you stick within the limits.

To qualify:

✅ It must be open to all employees, not just directors
✅ It must be an annual event (e.g. Christmas party, summer BBQ)
✅ The total cost per head, including VAT, food, drink, taxis, and any overnight stays, must be £150 or less

This isn’t just a nice perk — it’s fully deductible for Corporation Tax, with no Benefit in Kind and no extra National Insurance due.

⚠️ BUT!
If the cost goes even £1 over, the entire amount becomes taxable for the employee. So keep that budget in check!

🎁 2. Trivial Benefits — Up to £50 Each (Yes, Even for Directors!)

Want to give a little something without making it formal (or taxable)? That’s where trivial benefits come in.

You can give your employees — or yourself, if you're a company director — small, non-cash gifts, as long as they meet these conditions:

✅ The gift costs £50 or less (including VAT)
❌ It can’t be cash or a cash voucher
❌ It can’t be a reward for work or performance
✅ It must be something given “just because” — think thoughtful, not work-related

Perfect gift ideas:

• 🎅 Christmas hampers

• 🎉 Bottles of bubbly

• ☕ Coffee shop gift cards

• 🎂 Birthday flowers

Directors:
You can receive up to £300 per tax year in trivial benefits. That’s 6 x £50 gifts spread throughout the year — completely tax-free.

✨ Festive Tip: Be Generous, But Be Smart

So yes — you can be generous this time of year without giving HMRC an extra Christmas bonus too!

Whether it’s a full-blown party, a small gift, or both — with a bit of planning, you can keep the joy and skip the tax bill.

If you’re unsure how to record it, want to check your budget, or just need someone to run the numbers, I’m here (with bells on) 💁‍♀️

Yours in festive spirit (and savings),
Lisa x