Companies in Bradford gearing up for their annual Christmas party are being advised their celebrations could be tax free.

However, the Institute of Chartered Accountants in England & Wales (ICAEW) is reminding employers the benevolence of HM Revenue & Customs is limited.

HMRC's gift' allows companies an annual tax-free amount of £150 per head for staff parties.

It is important the total cost stays below this limit, which should not only cover food and drink, but also accommodation and transport, if the employer pays for these, plus VAT, divided by the total number of guests. The number of guests should include non-employees, such as partners.

The tax-free limit applies for a tax year, so if the employer gives a summer party and a Christmas dinner together costing less than £150 a head, both will be tax-free for employees.

Chris Manners, ICAEW Regional Director for Yorkshire & Humber, said: "Not only is having a Christmas party a morale booster to staff it is also a reward for the hard work that has been put in over the year.

"Businesses should make the most of the tax free amount and not just resort to some warm wine and plastic cups in the office."

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