Are virtual work parties tax exempt?
Yes, work parties, even if hosted virtually are allowable expenses and qualify for the annual party exemption.
HMRC have confirmed with the Institute of Chartered Accountants in England and Wales (ICEAW) that the annual party exemption applies to virtual parties up to a value of £150 per head.
The original source material on the annual party exemption
You can read the original insight piece from According to the ICAEW, virtual parties will be treated for tax purposes in the same way that it would be for traditionally held parties.
The key parts being:
“Having considered the scope of section 264 ITEPA03 (annual parties exemption), we are pleased to confirm that the exemption will apply to the costs associated with virtual parties in the same way that it would for traditionally held, parties.
Therefore, the cost of providing food, entertainment, equipment and other expenses which may be incurred in hosting a virtual event, will be exempt, subject to the normal conditions of the exemption being met.
It is important to note that the intention of the exemption is to allow for costs of provision which are generally incurred for the purposes of the event itself, and that the event, along with any associated provision, is available to employees generally.”
How can I learn more about the annual exemption?
If you are looking for a more detail overview check out more from the ICEAW here.