Staff from the UK government's treasury office had office drinks in breach of the nation's lockdown rules last year.
It is the latest Christmas party scandal to hit Boris Johnson's government.
It is understood more than two dozen civil servants were present for the drinks on November 25 last year, following their work on the Autumn Spending Review.
At the time, non-essential shops, leisure and entertainment venues were closed, as well as pubs, bars and restaurants. People were urged to stay at home, except for limited reasons, including work if it could not be done from home.
"A number of HMT staff came into the office to work on the Spending Review 2020," a spokesperson for the Treasury said.
"We have been made aware that a small number of staff had impromptu drinks around their desks after the event.
“The Treasury did not organise an in-person departmental party last Christmas.”
The Times newspaper said Chancellor Rishi Sunak was not at the event and it is understood he was not aware of it at the time.
Downing Street said it has cancelled plans to hold a Christmas party this year.
It came as Boris Johnson’s former aide, Dominic Cummings, said there are “lots” of photos of parties in No 10 that will “inevitably get out”.
Mr Cummings dismissed defences from the prime minister’s allies that he would not have known about celebrations going on under his roof amid signs Mr Johnson’s popularity is slumping.
Government chief whip Mark Spencer insisted Downing Street staff “were not drinking alcohol” and partying during Covid-19 restrictions after it emerged the prime minister’s press chief addressed staff at one event last Christmas.
No 10 said Mr Johnson retained full confidence in Jack Doyle to serve as communications director, despite ITV reporting he addressed up to 50 people and made a speech at one party on December 18.
Earlier this week, Allegra Stratton became the first casualty of the Christmas party scandal engulfing the government when she stepped down from her top post and tearfully apologised for her actions.
Her resignation came less than 24 hours after a leaked video recorded in Downing Street showed her laughing and joking about an alleged lockdown-breaking festive gathering.
Mr Johnson said he is “furious” after seeing the clip and has ordered an internal investigation to find out if the party took place last December while Tier 3 restrictions were in place, prohibiting social gatherings.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
