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  • Farrell & Farrell

CHRISTMAS GIFTS TO STAFF

 

If you are considering giving a Christmas present to your UK employees then why not consider a Christmas hamper, Christmas turkey or a Christmas shop voucher (non-cash voucher) up to the value of £50.

 

Since 6 April 2016 non cash vouchers given to employees as a trivial benefit up to the value of £50 are tax free.  A Christmas present could come under these trivial benefits rules.

 

Therefore to make it simple this Christmas please feel free to give all staff a Christmas present e.g. hamper, retail shop voucher, etc up to the value of £50.  

Assuming the following conditions are met, no tax or NIC or P11D reporting is required for such trivial benefits.

 

CONDITIONS:

 

  • The benefit must be non-cash or a non-cash voucher.

  • The cost of providing the benefit must not exceed £50.

  • It is not provided pursuant to salary sacrifice arrangements or any other contractual obligation, and

  • It is not provided in recognition of particular services performed by the employee or in anticipation of such services.  In essence, is for the goodwill/welfare of the employee rather than reward for services.

 

E.g. Trivial benefit rules - gift for birthday present, gift for marriage, gift for new baby, Christmas gift, etc.

 

The business must provide the non-cash gift/ non-cash voucher to the employee.  The voucher must be paid for out of the company funds, e.g. company bank account or company credit card.

If the benefit provided exceeds £50 the full benefit is taxable.

All cash payments are salary and are fully taxable.

 

Please note that the director/employee cannot purchase the voucher themselves and then seek reimbursement from the company.


A £50 cash payment to an employee could cost the employer ~ £80 for a basic rate taxpayer.

The trivial benefit non-cash voucher/present would cost the employer £50 only.


DIRECTORS OF CLOSE COMPANIES – Please note that Directors of ‘close’ companies cannot receive trivial benefits of more than £300 per tax year.


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