This is the most likely field to come under scrutiny by HMRC, as it carries the biggest potential to be abused by businesses. You are entitled to host an annual event - most commonly a Christmas party - as a tax-free benefit, providing you meet certain conditions. You may invite a partner but you must not exceed expenditure of £150 per head (including VAT). The event must cater mainly for staff. For example, expenses for one director and a plus one would be acceptable and would give you a budget of £300. However, if the attendants are not mainly employees then it would be difficult to argue the events main purpose is to entertain staff. Note that the £150 budget remains the same for multiple events and is a collective cost.