In his recent budget, Gordon Brown doubled the figure of £75 annual tax threshold to £150 for staff entertainment, thanks to lobbying by the events industry.

If your company employs 100 people, at the end of the accounting year £15,000 (including VAT) can be set against corporation tax for all forms of staff entertainment throughout the year.

Having a Christmas party on the cheap is a false economy though. What does it say about a company if it can't, or worse, won't, fund a decent event? If staff are pondering such a question (having just paid for their own drinks at the annual do), then it's actually been a hugely counter-productive exercise and, therefore, a complete waste of money. If a company's Christmas party isn't enjoyable, the cost in terms of staff morale and productivity, plus staff retention and any subsequent recruitment costs, is likely to far outweigh the additional money required to have made it enjoyable.

The Christmas party should be grasped as an opportunity for internal branding and communication, making staff feel good about the company, thereby boosting morale and productivity. Moreover, it's the perfect forum for the boss to stand up and at least say 'thank you for your efforts over the past year', as well as other important motivational and in-house marketing messages. That same boss should consider the Christmas party in simple business terms, ie for a cost there should be a measurable benefit. As with any corporate event, if aims are clearly defined (as they should be), then the end results can be evaluated.

So, rather than view the Christmas party as a costly chore, companies paying corporation tax should take a positive view and think to themselves 'Great, we can now give each member of staff £150 worth of party for just £90 a head, net'!