As an employer providing social functions and parties for your employees, you have certain National Insurance and reporting obligations. What’s included What you need to report and pay depends on: if it’s an annual event if it’s open to all of your employees if it costs more than £150 per head how many events you provide during the tax year whether the employee is a director, and how much they earn

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 open to all your employees be annual, such as a Christmas party or summer barbecue cost £150 or less per person This also applies to online or virtual parties. 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.

What to report and pay

If any of the events you provide aren’t exempt , you’ll have to report the costs to HM Revenue and Customs ( HMRC ) and pay National Insurance on them. You must: report on each employee’s form P11D pay Class 1A National Insurance on the full cost of the event Multiple or more annual events costing more than £150 per head combined If any of the events cost less than £150 per head, you may be able to count these costs as exempt. But you cannot do this if you’ve already used up the £150 exemption on another event. See an example of this. However, you’ll have to report and pay on the full costs of any additional events that go over this limit, even if they cost less than £150 per head on their own. Salary sacrifice arrangements If the costs of the events are less than the amount of salary given up, report the salary amount instead. These rules do not apply to arrangements made before 6 April 2017 - check when the rules will change .

The following guide contains more detailed information: particular benefits: annual parties and other social functions

Expenses and benefits: social functions and parties

Overview

As an employer providing social functions and parties for your employees, you have certain National Insurance and reporting obligations.

What’s included

What you need to report and pay depends on:

if it’s an annual event
if it’s open to all of your employees
if it costs more than £150 per head
how many events you provide during the tax year
whether the employee is a director, and how much they earn

View a printable version of the whole guide

Expenses and benefits: social functions and parties

Overview

What’s included

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Expenses and benefits: social functions and parties

Overview

What’s included

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