Mindful of the approaching Christmas and New Year festivities, it is timely to review the tax rules concerned with the provision of Christmas parties, other annual parties and gifts for employees.

The cost of entertaining employees is deductible for corporation tax, as long as it is available to all staff and not incidental to the entertainment of others. If customers are invited to the event then it will be necessary to consider a suitable apportionment of cost, to disallow the customer element for corporation tax purposes.