As hard as it is to believe, but provide your staff with social events and the tax man wants his cut. Social events are declared on the employers P11d as a benefit resulting in a tax charge and you have to pay class 1a NIC on the total cost.
However, HMRC do have a bit of festive cheer and there are exemptions to this rule so that you can get a tax free social event. To be exempt, the party or similar social function must be all the following:
- £150 or less per head
- annual, such as a Christmas party or summer barbecue
- open to all your employees