ANNA’s Business Research: How much on average is spent on a Company Xmas Party in the UK?

28 November, 2024 · 4 min read

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It’s nearly December so that almost certainly means you’ll soon be raising a festive glass with your work pals at the staff Xmas party. There’ll be sequins, prosecco and turkey, and who knows, maybe there’ll even be a bear behind the bar, like in our scene below! At ANNA we love an employee Christmas party, and we’ve immortalised one party in this picture. But can you find the ten £10 notes hidden in our classic Christmas work-do scene? Scroll to the bottom to see where they are hiding!

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What will your work-do look like this year?
Feeling the festive pinch
HMRC’s £150/head Christmas party allowance for limited companies
Introducing our new “Party Pot”
Dinner, drinks and a DJ are the most popular options
Enjoy celebrating with your colleagues

What will your work-do look like this year?

The puzzle is fun, but there’s a serious point behind it. We’ve just done a little survey with One Poll to find out how the UK’s SMEs are feeling about their staff Christmas party this year, and how much they’ll be spending.

Our poll of 500 SME owners and decision-makers found that they will be spending 10% less on their festive parties this December, even though 51% think it’s the best working day of the year.

The average SME will set aside just £1,353 for their celebrations to round off 2025 – equalling £108 per employee.

Feeling the festive pinch

Half of small business owners blame the new budget for their scaled back Christmas celebrations this year, according to our research.

Businesses that are spending less on Christmas parties are also doing so due to increased supplier costs (41%), lower demand for services (36%) and high taxes (33%).

Rent rises (30%), concerns around winter fuel bills (28%) and having more employees to pay for (26%) are other reasons why they’re scaling back plans.

HMRC’s £150/head Christmas party allowance for limited companies

Gosh, it’s tough out there! But are you one of the 53% of SME owners who had no idea they could reduce their company profits by spending £150 per head for their festivities (therefore making a corporation tax saving)? Yes, the good news is that there is a limited company Christmas Party allowance of up to £150/head if that’s the only social event the company throws annually (however many work parties you have, you can only claim £150/year in total). Which means the Christmas party is tax deductible!

“The benefit to the party, apart from keeping staff happy, is that company profits are lowered by the money that they are spending – which ultimately equates to lower taxes that the company has to pay on its profits.”

Aftab Hussain

ANNA’s accounting and tax expert

Introducing our new “Party Pot”

“That’s why we’ve created a new ‘Party Pot’ in ANNA +Taxes, to help businesses set aside this money and make off-setting it against tax really easy. Our aim is always to help SMEs run as tax efficiently as possible and save businesses time and money.”

The survey went on to find 53% think festive celebrations are important for boosting team morale.

Dinner, drinks and a DJ are the most popular options

What entertainment are you planning for your company Christmas party? Our survey found that this year 37% of respondents will be having a meal out, 28% will be going for drinks and 17% will be hiring a DJ.

Other popular activities include bowling, ice skating and boat trips.

Of those who are reducing costs, 47% will be staying in the same city to avoid transport charges and 41% will limit the amount of food and drinks per person.

Enjoy celebrating with your colleagues

It seems that even companies that have gone ‘all out’ in previous years might be reining it in a bit this Christmas.

We think that the key thing when celebrating is the people with you, so all you really need to have a fun time is a great group of colleagues. So eat, drink and be merry – and watch out for bears!