UK Businesses Average Christmas Party Spend

Dec 8 2016

Darren Best

Why Have A Christmas Party?

Businesses are of course not obligated to have Christmas parties but they are definitely recommended. Why? Because it’s a fantastic opportunity for those in management to say thank you to all the employees for their hard-work and dedication throughout the year. Likewise, hosting a party of some sort demonstrate to employees that the business genuinely appreciates your work. In turn, employee morale is more than likely to improve. Similarly, the Christmas party can act as the subtle gesture to entice employees to remain with the business as part of a long-term plan; especially those who are high-performers. 



Photo Credit: Africa Studio/Shutterstock 

Re-emergence of Office Parties?

Christmas parties never disappeared, but after the 2008 financial crisis, businesses were less extravagant and adventurous with their Christmas parties. Shackled by the recession, some businesses could not even afford it or decided against having a Christmas bash. Whilst some businesses are still recovering from the economic melt-down, many are now back in the partying mood. For example, last year, research revealed that UK businesses were set to spend over £1 billion on Christmas parties alone. That’s an astronomical amount. Hence the rejuvenation of Christmas office parties as the pinnacle social event of the year. 

Other Business Considerations

For businesses there is no specific allowance for having a Christmas party but HMRC do provide a limited tax exemption for annual events. With Christmas parties being counted as an ‘annual event’ alongside any summer ball or New Year gathering – it should be an event that is open to everyone in the business and not just senior figures. 

The non-taxable limit per employee set by HMRC is £150 (including VAT) per year for ‘annual event’s’. Included within this figure is accommodation, travel, food and hiring costs incurred. Any of these alone or combined should not go beyond the £150 threshold per employee for the taxable year. 

Of course, the entire amount does not need to be spent against a single event but businesses are generally very careful and conscious not to exceed the set amount for each employee. Another consideration why some businesses budgets may be lower than some is because some may have already spent some of the £150 per employee for their summer ball (if they had one) or partially allocated it towards a new year event (if they are to host one).

Another important aspect to consider is that some businesses usually have their employees partially pay out of their own pockets for certain aspects of any events they host. Most commonly, employees tend to pay for their own drinks and arrange their own transport. Consequently, the spend per employee across different businesses will always fluctuate due to every business having a different approach towards how they organise and conduct the arrangements for their social and annual events. 

How Much Are UK Businesses Looking to Spend?

With Christmas parties back at the forefront of business affairs, surveyed over 120 office-based businesses from across various different towns and cities outside of London - to find how much they intended, estimated or had already budgeted to spend per employee for their respective Christmas parties. 

Once all the responses had been gathered, the data was then analysed to calculate the collective average spend per employee by businesses in each of the represented towns and cities. Responses were gathered from a range of businesses from different sectors and industries to gain a broader scope.


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The Findings

The research fascinatingly reveals that businesses spend per employee on Christmas parties greatly varies between different towns and cities. 

Based on the average spend per employee, businesses in certain towns and cities are significantly more generous in their spending than others. 

With a substantial average of £37.06 being allocated per employee, those working for businesses in Birmingham can expect to have some of the best Christmas parties in the UK. Businesses in Manchester are then the second most generous, with an average spend of £34.67 per employee. Manchester is then followed by Glasgow, where businesses are set to gracefully splash an average of £33.98 per employee.

The least generous or as some would label the “stingiest” businesses in the UK are in Exeter, where the average spend per employee is only £8.76. The next lowest spends are by businesses in Oxford and Norwich, where they will respectively shell out on average £10.08 and £11.91 per employee. 

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