As we approach Christmas, thoughts naturally turn towards staff parties and celebrations. But in 2024, getting merry doesn’t necessarily mean copious amounts of booze.

According to The Drink Business, almost a quarter (21%) of Christmas parties will be alcohol-free this year. So, with team-building ‘activity’ style options like axe throwing and escape rooms growing in popularity, it could be time to rethink your plans.

Alternative Christmas parties can still have tax-deductible benefits to help cover costs. Here’s a rundown of the rules:

Staff party tax rules – what can you claim?

Hosting a party or social event for your staff can be classed as an allowable tax-deductible expense. Still, as with anything HMRC-related, you must meet some strict criteria for your expenditure to qualify.

• Your party doesn’t have to be held at Christmas – you can host a social event for your staff any time of the year, as long as it is held annually.
• Staff won’t be penalised on a ‘taxable benefit’ basis providing the cost does not exceed £150 per person.
• You can claim ‘employee entertainment’ as an allowable expense, benefiting from tax relief at whatever rate you pay e.g. as a Ltd company, sole trader or partnership.
• The event must be completely inclusive, with the option to attend/participate open to all staff across all locations if you have more than one premises.
• You can split the maximum cost per head of £150 across more than one event if you wish, providing you meet the above criteria.

View HRMC’s information on social function expenses and benefits.

Alternatives to traditional Christmas parties for 2024

If it’s what they’d prefer, there’s nothing wrong with wining and dining your staff. But nowadays, your workforce’s idea of raising Christmas spirits may be more adventurous than drinks or a meal out.

Of course, you can combine both; many venues include activities and refreshments as a package. Here are some we particularly like the look of:

• Get crafty with a Christmas workshop:  Wreaths, chocolates, gingerbread houses and Christmas decorations. You can buy them all, but wouldn’t it be more satisfying to make one over a mulled wine or cider? It’s a lovely way to spend a few hours, and the best bit is you get to take your creation home – unless it’s edible, and then there’s no guarantee it will get there.
• Get creative with a paint-and-sip session: Like the craft sessions above, paint-and-sip sessions are growing in popularity. Venues like Pinot and Picasso help unleash your inner Van Gogh over a glass of vino. It’s a relaxing start to a low-key Christmas party.
• Get away from it all at a wellness retreat: Speaking of relaxation, the run-up to the festive period is hectic. So, why not give your staff a few hours of authorised relaxation? Many spas do morning, evening or twilight sessions, plus lunch or refreshments within the cost-per-head budget. If you can’t fit it in before Christmas, January is an even better time to grab a spa-break bargain.
• Get active with a team-building-style activity: Escape rooms, axe throwing, assault courses; plenty of activities get you warmed up and thinking as one. This is also a great option for those colleagues who may not want to go for drinks later. They can still get involved but opt out of evening activities.
• Get your game on at an interactive sports venue: Venues like Roxy Ball Rooms, Flight Club and Sixes Cricket let employees battle it out for supremacy over a series of fun, interactive games. They’re less physical than team-building exercises (always warm, indoors). The competition element takes the focus off drinking – and let’s face it, you may have more success if you don’t!

Whatever you’re planning, remember that all you need to do is stick to the rules, and you’re free to focus on fun! 

We’re always on hand to offer tailored advice, so if you’re unsure of anything, please get in touch.