But, will the same allowance apply if that party is held virtually?

Businesses are able to claim a tax allowance of up to £150 per person towards the cost of organising and hosting an annual social event for staff. To qualify, the event must be open to all employees to attend.

Yet as the country remains under lockdown and with strict social distancing rules, the traditional office party is looking unlikely. And that, says Mercer & Hole, is where businesses may face problems.

Jamie Wooldridge, Director, Mercer & Hole explains.

"Employers looking to host a virtual Christmas party will need to plan that event carefully, including the possibility of being able to demonstrate employee attendance to qualify for the tax relief.

"In practice, that may mean incorporating some of the more structured elements often seen in the traditional Christmas party - perhaps the hiring of a magician, a stand-up comedian or holding a quiz - that are designed to engage everyone attending."

Further complications may arise over the provision of food and drink by a business, says Jamie.

"Businesses may be tempted to provide staff with a budget for food and drink and have them reclaim via expenses. That is likely to be difficult to police.

"A simpler option might be for a business to provide food and drink, perhaps via a choice of hampers, for staff in advance of the virtual party. But here too, a business may fall foul of what is called the 'trivial benefits rule' where gifts of a value up to £50 can be made without incurring any tax liabilities. If a business exceeds the £50 limit tax will be payable.

"The two can work alongside each other, but businesses will need to keep clear records of both the value of gifts and the virtual Christmas party, and employee attendance. The Christmas party is likely to be a harder gig for everyone this time around."

Mercer & Hole is a 24-partner firm working across four locations - London, St Albans, Rickmansworth and Milton Keynes. Visit www.mercerhole.co.uk