As the festive season approaches, so does the question: Which Christmas expenses are tax-deductible? Whether you’re a sole trader, limited company, or run a small business, understanding HMRC’s rules helps you optimise holiday spending without falling foul of tax regulations. ✅ What You Can Claim 1. Annual Staff Christmas Parties – The £150 Exemption Providing the event meets HMRC’s criteria, a year-end staff party can be fully tax-free up to £150 per head , including VAT.