ATT Budget Representation - Extending tax relief for annual parties and social functions

The ATT has submitted an Budget Representation on annual parties and social functions.

In this submission, we have called on the Government to increase the tax exemption for annual parties and social functions, which has remained at £150 per head (including VAT) since it was introduced in April 2003.  However, employers frequently find this is insufficient to cover the cost of (say) a Christmas party for staff, especially in London and other more expensive parts of the country. 

Our recommendation is that the exemption should be set at a level that allows employers to organise an annual social function without incurring a tax liability.  To take account of movements in inflation since 2003, we have suggested this should be increased to at least £280 per head (including VAT).

To avoid the exemption being eroded in future, we feel that it is important for the value of the exemption to be reviewed regularly, with the intention of it being increased at least every five years.