1 in 3 won’t attend work Christmas party to save money

The cost-of-living crisis is set to cut attendance at workplace Christmas parties this year, as one in three people are shunning socialising to save money.

As many as 37%1 of the workforce could be avoiding their annual work party due to money worries, with one in two people2 planning to spend less money on Christmas costs this year.

As employees feel the pinch, three in five workers3 have been asked to supplement the cost of their work Christmas parties by their employer, according to analysis by The Accountancy Partnership.

In fact, more than one in 10 (13%) Christmas parties aren’t happening at all, giving hard-working employees little to celebrate this winter. While more than a third (36%)4 of Christmas celebrations will be scaled back due to cost-saving measures.

Oliver Irwin, accounts senior at The Accountancy Partnership, said: “Christmas parties are a great way to bring staff together and thank them for their hard work over the past 12 months. The vast majority (86%)5 of bosses believe that the annual get-together is important for employee wellbeing, morale, and mental health.

But despite the morale boost, businesses aren’t always able to fund this, especially considering the current economic conditions.

“Both consumers and businesses have been impacted by surging inflation and energy prices, creating a catch-22 situation. This means more people are being asked to contribute to their Christmas party, making some think twice about whether it’s easier not to attend at all.”

Oliver continued: “It’s important to take time away from your workload to improve wellbeing and prevent burnout, whether you do that by socialising with colleagues or not is entirely your choice. Employees don’t have a legal obligation to attend work gatherings outside of their contracted hours, and businesses don’t have to organise and pay for parties so if your business simply can’t afford to pay for a party this year, then keeping those funds available for the business is much more beneficial for employees anyway. Money worries are front of mind for many people, and business owners are no different.”

Research shows two fifths6 of work Christmas parties are fully paid for by the employer, with some businesses going the extra mile each year, taking their employees abroad or to other parts of the country as a reward.

Oliver added: “Business that are going ahead with the Christmas do should be aware of the tax breaks available for Christmas parties, so there is a silver lining to rocking around the Christmas tree. Tax for annual events is deductible up to £150 per employee per year, including VAT and any additional costs such as transport or accommodation.

“As the Christmas party is an exemption rather than an allowance, you do actually have to spend it, therefore it is crucial to keep costs under £150 per person because if it exceeds this, the whole amount will be subject to tax and National Insurance, not just the part above the allowance.”

Eight in 10 (81%) business owners admit to not fully knowing what qualifies as a legitimate expense, and this has resulted in an “expense hesitancy epidemic” that sees around £5.6 billion missed in unclaimed expenses each year, according to research on the topic.