Christmas is coming and the staff want to celebrate. That's OK because the Taxman allows a full tax deduction for entertaining staff and their partners, as long as the guest list doesn't include the company's customers or suppliers.

Keep an eye on the total event costs (including VAT) and divide it by the number of partygoers. If the answer is £150 per head or less, the staff can have a tax-free knees-up. If the cost per head is more than £150, then the full expense must be apportioned between the staff who attended and reported as a benefit-in-kind on form P11D for each of them. If you hold a number of staff parties in the year, the £150 per head limit applies to the total cost of all these events.