My client is holding a staff Christmas party this month and also held an annual staff summer event. Therefore, will the Christmas party now become a taxable benefit each year and not benefit from the exemption?

Section 264 ITEPA 2003 details an income tax exemption for annual functions. The exemption is not restricted only to a Christmas party, it can used for alternative annual functions during the year.

The exemption must be used for annual functions so for functions that can happen again the following year. For example, the exemption cannot be used for a one-off function such as the 10th anniversary of a business.