HMRC social functions and parties.

It is that time of year when an employer considers the Christmas party - including directors' of a company.

The employer or limited company is permitted to pay for a function in which is tax deductible for the business and tax exempt as a perk for the employees.

There are 3 condition which must all be met to be exempt:

• <£150 per head.
• Annual function such as a Christmas party or summer barbecue.
• Open to all employees.

I not sure how a single director company can have  party on their own, but you could take your partner/family out and has long as your share (one half or one quarter for a family of 4) is less than £150, you could claim it from the company.

If a two director company went out, the function could be paid directly with the company debit card. If a single director took out their family, best to recover their share of the cost through the director's monthly expense claim.

Happy holidays.