A RECRUITMENT company says research shows that more companies are using Christmas parties to help motivate staff.

A survey of 200 organisations by Reed found that seasonal celebrations are seen as more important to staff than other incentives such as gym membership and empowerment schemes.

Katy Nicholson from Reed said: "With staff morale a higher priority for companies these days, organisations realise they need to increase opportunities for people to get together outside work.

"Helping people get to know each other across all levels of an organisation in a relaxed, informal setting breaks down barriers and makes everyone feel better about their jobs."

Meanwhile, accountants are advising businesses which organise Christmas parties for their staff that they are eligible for tax relief.

The Association of Chartered Certified Accountants (ACCA) says that as long as certain rules are followed, staff party costs are fully tax-deductible as an expense of the business and non-taxable on the employee.

To qualify for the tax relief, the Christmas party must be open to all staff and total costs, including taxis and accommodation must not exceed £75 a head.

Expenditure exceeding £75 can still be claimed as a business expense, but is classed as a benefit in kind for employees, leaving them liable for tax at their highest marginal rates.

Ilyas Patel, ACCA's spokesman for the North-west, said: "Many companies are unaware that they can claim back the full amount of VAT on top of obtaining a tax deduction for staff entertaining, which naturally includes Christmas parties.

He added: "This relief may not be so useful during the festive season as it excludes any gifts of alcohol or tobacco.

PARTY GIRL: Kathryn Lucas, who works for Allanson's Solicitors in Central Street, Bolton, posed for this party picture when she was the Bolton Evening News Girl of the Year in 2000.