A number of Christmas parties have been cancelled due to new coronavirus restrictions being imposed and the rapid spread of the Omnicron variant, but there are other ways employers can reward employees, according to Blick Rothenberg.

Robert Salter, a client service director with the tax and advisory firm, said: “The good news is that there are a number of options for employers looking to support their employees with a ‘Christmas Thank You’, if their Christmas party is cancelled.

“It is possible to run Virtual Christmas parties, with the employer providing food and wine for the employee. The tax man has confirmed that such virtual events qualify as an annual party and would therefore be potentially tax free for the employer or employee (subject to the £150 per person annual limit which exists for traditional Christmas parties.”

“Alternatively, delaying the Christmas party until the New Year – say February or March, when the Covid restrictions would hopefully have ceased, should still enable employers to treat the event as an annual party and treat the costs, again subject to the £150 per person limit, as potentially a tax-free reward for staff.”

Christmas hampers are an alternative to the Christmas party, or indeed, an addition to the party option.

He added: “The good news is that providing the value of the hamper is no more than £50 per person this could be a tax-free benefit under HMRC’s ‘trivial benefit’ rules. Hampers worth more than £50 per person would be a taxable benefit.

“Whilst the above options may not be a ‘full replacement’ for the Christmas party they would help employers show their staff that they continue to value their contribution and wish to support them at this time of year, and if correctly costed ensure that there are no tax liabilities for either employees or employers.”