If you run a small limited company, maybe it’s just you, or you plus one or two others, you can still make the most of HMRC’s annual event exemption. It’s a really straightforward way to enjoy a Christmas meal or day out without creating a tax bill.
The Basics
HMRC lets limited companies spend up to £150 per person per tax year on an annual event, such as a Christmas meal, without it being treated as a taxable benefit.
This applies even if you’re the only employee of your company.
So yes, you can take yourself out for a Christmas meal and put it through your business, as long as you follow the rules.
What You Can Claim
The £150 limit must cover everything:
- Your meal or event cost
- Drinks
- Taxis / travel
- Entertainment
- VAT
If you bring a guest, they count as a “person” too, so you get £150 each.
For example, you + partner = £300 total allowance.
What You Can’t Do
- You can’t split the £150 over several small events if it totals more than £150 per person for the year.
- Go even £1 over and the whole amount becomes a taxable benefit, not just the extra.
- It must be an annual “event”, not a casual lunch you pop on the card every month.
One-Person Companies
If you’re a sole director and the only employee, the rules still apply in full. Many small business owners don’t realise they can do this, but it’s perfectly legitimate.
A few examples you can claim:
- A Christmas lunch at a restaurant
- A festive afternoon tea
- Tickets to a Christmas show
- A winter experience day
Just keep it reasonable and within the £150 limit.
Very Small Teams
If there are two or three of you, the same rules apply, Just make sure the event is open to all employees.
If you have a part-timer or someone who works remotely, invite them too. They don’t have to attend, but the invitation needs to be there.
Virtual Events Still Count
If you prefer something low-key or remote, a virtual event can qualify.
For example:
- Hampers or meal kits delivered to each employee
- An online activity (quiz, games night, escape room)
As long as the cost per head stays within £150 and it’s clearly an annual event, it’s fine.
How to Record It
- Pay for the meal/event from the company account
- Keep receipts
- Keep a simple note of who attended
- Categorise it as “staff entertainment” in your bookkeeping software
A Quick Example
You go out for a Christmas meal:
- Meal + drinks: £52
- Taxi home: £18
Total: £70
This is well within the £150 allowance — fully tax-free and a valid company expense.
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