HMRC has confirmed that the annual parties exemption in ITEPA 2003 s 264 can apply equally to virtual parties, such that the cost of providing food, entertainment, equipment and other expenses which may be incurred in hosting a virtual event, will be exempt, subject to the normal conditions of the exemption being met.
HMRC has updated its Employment Income Manual (at EIM21690) to cover ‘virtual functions’ and has added the following example (at EIM21691):
‘A company holds one annual function in a tax year and does so virtually using IT. All employees are invited and each is provided with a hamper consisting of some food and drink to be enjoyed by the attendees during the party. The total cost per head is £100 which is within the £150 exemption and so the exemption applies.’
HMRC has confirmed that the annual parties exemption in ITEPA 2003 s 264 can apply equally to virtual parties, such that the cost of providing food, entertainment, equipment and other expenses which may be incurred in hosting a virtual event, will be exempt, subject to the normal conditions of the exemption being met.
HMRC has updated its Employment Income Manual (at EIM21690) to cover ‘virtual functions’ and has added the following example (at EIM21691):
‘A company holds one annual function in a tax year and does so virtually using IT. All employees are invited and each is provided with a hamper consisting of some food and drink to be enjoyed by the attendees during the party. The total cost per head is £100 which is within the £150 exemption and so the exemption applies.’
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