Christmas party considerations for businesses

POSTED: 19th November 2014
IN: Guides

Christmas brings many considerations for businesses: making the most of the peak in demand in certain sectors, allocating holiday time and preparing for inclement weather, to name a few.

Firms could find that Christmas party costs are tax deductible.

Something else to consider is the Christmas party. How big an event can you afford, or would your staff prefer another reward or experience?

Here are a few things to think about when planning your festive celebrations.

Do your employees want a party?

It seems pointless investing the time and effort in arranging a party if your employees feel ambivalent towards the prospect. undefined

According to research published by insurance company MetLife last December, seven out of ten workers would rather receive a cash payment of the amount their employer would spend on the Christmas shindig than actually attend the event.

Commenting on this finding, Tom Gaynor of MetLife said: "[It] is understandable with finances under pressure, but it should not mean companies give up on rewarding staff with parties and other benefits which are not directly related to pay."

Is the party tax deductible?

Before arranging your party, it is worth making sure that the costs involved in hosting the event are tax deductible.

HM Revenue & Customs (HMRC) does allow some exemptions for annual party expenses, subject to conditions such as the celebrations being held regularly and being open to all staff.

You can find out more about this on the HMRC website. It is well worth doing some research into this topic to ensure that your festive celebrations are as financially efficient as possible.

Try to include everyone

If you decide to go ahead with a party, remember that not everyone will want to celebrate in the same way. Many people will not want to drink alcohol or certain foods for personal, religious or health reasons, for instance.

Ask all attendees about their preferences beforehand and give some thought to alternative foods, drinks, themes or entertainment so everyone feels included.

Take the opportunity to praise and reward

Bear in mind that your annual Christmas party should be more than an opportunity for people to have a drink and let their hair down, although this is obviously important.

The event provides the perfect platform for bosses and managers to show staff that they are a valued and important part of the business. Senior figures should make the effort to interact with as many people as possible and encourage others to do the same.

Furthermore, a festive celebration is a good opportunity to reflect the hard work that your staff put in and recognise outstanding achievements by presenting awards.

Don't forget the boring stuff

Concerns such as health and safety, insurance and employee conduct are far from festive, but it is important not to lose sight of them during your Christmas celebrations.

Remind staff that they should continue to behave in a respectful way towards each other and their surroundings, particularly if the party is being held in the office.

You should also give some thought to the best day of the week to hold your party. A Thursday or Friday is likely to be the most popular option, but venues are likely to be more expensive on these days. Hosting the event earlier in the week could prove cheaper, but late-night celebrations could affect productivity on the following days.

Your insurance might not cover you against certain types of damage or costs incurred during a party, so take as many precautions as possible to protect electrical equipment and other expensive items. When the night is over, make sure someone takes the responsibility of ensuring that everything is switched off and locked up as normal.


Like any company expense, it is important to budget for the cost of your Christmas party and to make sure you are not spending beyond your means.

Take into account primary costs such as food, drink and hiring a venue, as well as the financial impact of gifts, entertainment and any other extras.

If the business is financially stretched, keep your plans modest and make the most of the resources already at your disposal, such as your office space. Sometimes, a few decorations, food and drink and some music are all that is needed to create a festive atmosphere.

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