SE21694 - Benefits: Christmas parties and other social functions: more than one function: example

Extra Statutory Concession A70

A company holds two annual dinner dances open to all its employees in the tax year. The total cost of the first, including transport and accommodation provided for certain guests, was £5,460 including VAT. The total number of persons attending was 84 and the cost per head was therefore £65.

The second dinner dance cost £6,424, including VAT, and 88 people attended this. The average cost was therefore £73.

The total cost per head for both functions was £138 so they cannot both qualify for concessionary treatment ( SE21690). Since the cost per head of each on its own was not more than £75 either can qualify for concessionary treatment on its own. It is more beneficial overall for the second to be exempted by the concession so the benefits arising from that function will not be charged and those arising from the first function will be charged.

(If the average cost per head of one of the functions exceeded £75 the full amount of the benefit of that function would be chargeable.)