Is there a limit on how many trivial benefits employees can receive?

For employees who are not directors of close companies, there is no overall annual limit on the number of trivial benefits they can receive, provided each benefit meets the trivial benefit conditions and costs £50 or less. Close company directors, however, are subject to an annual cap of £300 in total trivial benefits.

Is a team meal considered a trivial benefit?

A team meal can qualify as a trivial benefit if the average cost per employee is £50 or less and all other trivial benefit conditions are met. If the average cost per head exceeds £50, the full amount of the benefit may become taxable for the employees.

When is the Self Assessment Tax Return due for the 2024/25 tax year?

For the 2024/25 tax year, the Self Assessment Tax Return filing deadline is 31 January 2026. Any tax payable under Self Assessment is also due by 31 January 2026.

Can Onside Accounting help with my tax return or festive payroll planning?

Yes, Onside Accounting can assist with Self Assessment tax returns, festive period tax planning, employer and employee tax matters, and wider tax and accounting support. You can contact the Onside Tax Team using the enquiry form on the website or by emailing hello@onsideaccounting.com to discuss how we can help.

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2 December 2025

Festive Season Tax Planning Tips for UK Employers

Q: Are staff Christmas parties tax-free?

Yes, staff Christmas parties can be tax-free if the total cost does not exceed £150 per head for the tax year. This includes all attendees, such as employees and their partners. If the cost goes over £150 per head, the entire amount becomes a taxable benefit for the employee, not just the excess.

Q: Can we host multiple staff events and still use the £150 exemption?

Yes, you can host multiple staff events, for example a summer BBQ and a Christmas party, and still use the £150 exemption, as long as the combined total cost of all qualifying events stays under £150 per head across the tax year.

Q: Can partners or spouses attend the staff event under the exemption?

Yes, partners or spouses can attend and be covered by the exemption. The allowance effectively becomes £300 per couple, based on £150 per head. However, partners must be included when calculating the total cost per head for the event.

Q: What happens if the event costs £151 per head?

The £150 staff event exemption is an all-or-nothing exemption. If the event costs £151 per head, even by just £1, the full amount becomes a taxable benefit for each employee and is no longer covered by the exemption.

Q: What is considered a trivial benefit?

A trivial benefit must meet all of the following conditions: the cost of providing the benefit does not exceed £50; it is not cash or a cash voucher; it is not provided as part of a contractual obligation or in recognition of particular services; and it is given for a non-work reason, such as a festive gift. If the cost exceeds £50, the full amount is taxable.

Q: Can directors receive trivial benefits?

Yes, directors can receive trivial benefits, but there are additional limits. For directors of close companies, the total value of trivial benefits they receive must not exceed £300 per tax year. Each benefit must still meet the normal trivial benefit conditions.

The festive period is often a time where business owners reflect on the year’s successes, and reward themselves and their dedicated teams for their hard work through the year.

This article explains the tax implications of festive bonuses, parties, and gifts for UK employers.

Paying bonuses, taking the team out for dinner/activities and gifts, are all avenues that employers may want to explore. However it is important to understand and navigate the tax rules here to ensure you are getting the best results for the business, and the employees.

Staff Parties & Annual Events – The £150 Rule

Stay under £150 per head

In the absence of any specific exemptions, where an employee is provided with a non-cash benefit, this benefit is taxable and may result in them having additional tax to pay. However, there are specific exemptions, including for the provision of an annual function/staff party. For these exemptions to apply, the total cost per head of the annual function(s) can not exceed £150.

Key points to be mindful of include:

The event can include partners (a total of £150 per head (£300 per couple) per annum applies)

The per head amount can cover more than one annual event, provided that the total cost of all events does not exceed £150 per head for the year

Employers should be mindful of exceeding the limit, as it is an all or nothing benefit. If an event ends up being £151 per head, each employee will have a taxable benefit of this amount (so employers may want to limit any pre- or post-event drinks receptions or other extras, to keep within the exemption limits).

Trivial Benefits – Use the £50 Allowance Wisely

With love from me to you!

Providing a non-cash benefit to an employee can result in them being subject to additional tax, but there is also an exception for ‘trivial benefits’. A benefit can be classed as a ‘trivial benefit’ if the cost of providing the benefit does not exceed £50. If the cost exceeds £50 the full amount will be taxable.

Cash or cash vouchers cannot be trivial benefits. In addition, the benefit cannot be provided as part of a contractual obligation, including a salary sacrifice arrangement, or in recognition of particular services carried out by an employee. In other words, the exemption only applies if the benefit is provided for a non-work reason, for example, a festive gift!

Points to note:

Where the benefit is provided to a number of employees, the average cost of providing the benefit can be compared to the £50 limit, e.g. dinner and drinks for the team.

There is no limit on the number of trivial benefits that can be provided in the tax year, except where the individual is a Director in a close company. In this case, the total value of trivial benefits cannot exceed an annual cap of £300.

Self-Assessment Deadlines – What You Need to Know

Lastly, the deadline for filing your 2024/25 tax returns is fast approaching! Self Assessment Tax Returns for 2024/25 are due by 31 January 2026, and any tax payable is due by the same date.

We have a wealth of knowledge and experience in the Onside Tax Team and would be delighted to assist with the preparation and filing of the tax return on your behalf. Please contact us using the link below (the sooner the better!!) if you require any assistance, and we will be in touch to discuss the next steps.

Key Takeaways for Festive Tax Planning

Tax is probably the last thing on the minds of employers and employees as we head into the festive period. However, with some straight-forward planning, it is possible to maximise reliefs and exemptions to get the best tax results for employers and employees, and to ensure there are no nasty tax surprises in the new year!

If you enjoyed this post, you may want to read Employee Benefits & Compliance: A Founder’s Guide to Tax-Efficient Perks - click here

Questions? Read Our FAQs

Are staff Christmas parties tax-free?

Yes - if the total cost does not exceed £150 per head for the tax year.
This includes all attendees (employees + partners).

If the cost goes over £150 per head, the entire amount becomes taxable, not just the excess.

Can we host multiple staff events and still use the £150 exemption?

Yes. You can have several events (e.g., summer BBQ + Christmas party) as long as the combined total stays under £150 per head across the year.

Can partners or spouses attend the staff event under the exemption?

Yes. The allowance effectively becomes £300 per couple (£150 × 2). However, partners must be included in the per-head calculation.

What happens if the event costs £151 per head?

The exemption is all or nothing. If you exceed £150 per head by even £1, the full amount becomes a taxable benefit for each employee.

Can directors receive trivial benefits?

Yes - but with limits.
For directors of close companies, trivial benefits are capped at £300 per tax year in total.

What is considered a ‘trivial benefit’?

A trivial benefit must meet all of the following:

Cost does not exceed £50
Not cash or a cash voucher
Not provided as part of a contract or performance reward
Given for a non-work reason (e.g., festive goodwill, birthday, wedding)

If it exceeds £50, the full amount becomes taxable.

When is the Self Assessment Tax Return due?

The filing deadline for the 2024/25 tax year is: 31 January 2026
Any tax owed is also due by the same date.

Contact Onside Accounting for Expert Tax Planning Support

If you have any queries about matters detailed above, would like to discuss how they may impact you or your business now or in the future, or you simply want to learn more about how Onside can assist you and your company with all your tax and accounting matters, get in touch!

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