Considerations for your Christmas Party planning
News & blog » The Christmas Party
The festive season is that time of year when we all relax a little with our colleagues and look to celebrate together at the annual Christmas party.
There are many types of parties held and the Leisure & Hospitality sector will be busy ensuring everyone has the party to remember for the right reasons.
However from a business perspective, here are a couple of areas for consideration.
Your people – Unforeseen complications as a result of the party
Your work’s Christmas Party should be a celebration of the festive season, the past years’ achievement and an opportunity to have fun and relax. However the mix of alcohol and the loosening of normal workplace behaviour can create a whole range of complications for you.
Employers need to be aware that they can be held vicariously liable for the actions of their employees at Christmas Parties, if those actions are deemed to have been committed in the course of employment. Sexual harassment by a colleague at a Christmas party can lead to a successful claim against the employer and disputes between colleagues leading to fighting or assault can leave the employer at risk of an unfair dismissal claim.
Do you have a clear policy on the standards of behaviour expected at Christmas parties? Are you considered to be influencing the behaviour of your people? Even though the party is a social occasion any problems should be managed in line with normal disciplinary procedures.
The finances – can you claim VAT on your Christmas party?
If you are treating your staff to a Christmas party you should be aware of what is allowable and what is not according to HMRC.
VAT can be claimed on staff entertaining which would include parties if they are for a business purpose. A business purpose would be to reward staff for good work or to improve morale.
VAT can be claimed for directors, partners and sole traders if they are attending the event with their staff. However, VAT cannot be claimed if entertainment is provided only to directors, partners or sole traders (usually ‘the owners’) as the entertainment is not provided for a business purpose and HMRC does not consider that they need to reward or motivate themselves.
If staff bring a partner or guest to a company party and the cost is covered by the business only the VAT on the staff element of the cost can be claimed and not the VAT on the cost of the whole event.