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HMRC has confirmed to the Association of Taxation Technicians that a virtual Christmas party will fall within the rules for the annual parties exemption (ITEPA 2003, s 264) in the same way that it would for traditionally held parties. So, the cost of providing food, entertainment, equipment and other expenses that may be incurred in hosting a virtual celebration will be exempt, subject to the normal conditions of the exemption being met.
The department added that the event, along with any associated provision, must be available to employees generally.
HMRC has updated the Employment Income Manual at EIM21691 and EIM21690 to reflect this.
