SME owners and decision makers are attributing the Labour government’s new budget as the reason for their scaled back Christmas celebrations this year, research suggests.
Despite Christmas festivities being considered one of the best working days of the year, smaller businesses plan to reduce their celebrations by 10%.
Over half of SMEs believe that festive celebrations play a crucial role in boosting team morale, however, they admit they’re having to make cut backs this year.
This year’s celebrations will look different – 37% plan on having a meal out, while 28% will only be going for drinks, instead of putting on more expensive events that include live bands or Michelin-starred restaurants.
A spokesperson for business account brand ANNA, who conducted the study, said: “It’s a fun time of year but Christmas parties can be very expensive, and when that’s paired with a tough trading year, it’s no wonder plans are being scaled back.”
This year the average SME is planning to allocate just £1,353 for their end-of-year celebrations in 2025 equating to £108 per employee.
However, it’s not just pressure from the budget causing concern; increased supplier costs, lower demand for services and high taxes have also led businesses to scrutinise areas where they can reduce expenses. This is among rent rises and increased winter fuel costs.
Despite the challenges, two thirds are determined to host a successful company event this year, as they believe their staff deserve a reward. But what 53 % didn’t know is that they can claim back £150 per head in tax for their festivities.
The spokesperson from ANNA, added: “It’s a real shame that so few businesses know they can claim £150 tax free per employee for seasonal parties – which would at least go some way towards making Christmas planning more achievable.”
“First step is keeping all your receipts for party expenses, and keeping track of what you are spending per employee to ensure you make the most of this party perk, without over spending – or it becomes taxable.”
“It’s claimable at the end of your company’s financial year, when you do your accounts and file them with HMRC.”
“It’s a real shame that so few businesses know they can claim £150 tax-free per employee for seasonal parties – which would at least go some way towards making Christmas planning more achievable.”