The cost of providing the Christmas lunch for staff will be a tax deductible expense for your business. However you will need to consider the benefit in kind rules for the employees.
If the employer provides employees with one annual function, no charge to tax arises if the cost of the event per head does not exceed £150. It is important that you must provide this event to all employees, and cannot just provide it to a select few, as this will not be covered by the exemption.
As you will be providing two functions, then you must aggregate the cost for each employee, and if this does not exceed the limit no benefit in kind will be assessed. The figure of £150 is not an allowance, and if the employee chooses not to attend the meal or party, they cannot receive the allowance in cash tax free.
You should be aware that if the combined costs, including VAT, exceed £150 per head, then a benefit in kind is assessed on full cost of the event which exceeds the limit, as it is not just the excess over the exemption which is chargeable.