Are you looking to treat your employees this Christmas time? It is the most popular time of the year to say thank you to your team for all their hard work, but make sure you are fully aware of any tax implications related to staff entertainment.

Douglas Home and Co Payroll Manager, Geoff Campbell, has broken down any restrictions to help you plan this festive season; “Cash gifts, gift vouchers or large gifts that are given to your employees are all taxable. All bonuses must go through payroll whether they are paid in cash or by bank transfer alongside the employee’s standard pay.”

“However, there are tax allowances for internal company events. Businesses have an allowance of £150 per employee each year for annual events (most commonly a Christmas party night). If your company has more than one annual event it is still not taxable so long as the total cost of all annual events does not exceed the £150.00 threshold. This allowance cannot be given out as a cash gift, it must be used towards the event.”

Employees may receive gifts from third parties as a result of their employment. As long as the gift does not exceed £250 in cost, it should not be taxable for the employee.

The above rules relate to staff entertainment only and the same rules do not apply to client entertaining.

For any specific payroll, employee benefits or client entertainment questions, please contact Geoff Campbell on or call 01573 225082.

Douglas Home & Company is a Chartered Accountancy and Tax Advisory firm offering expert advice and financial leadership to individuals and businesses of all sizes. They have eight offices across Scotland and North England with their headquarters located in Kelso, Scottish Borders. To find out more about Douglas Home & Co, please visit