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.
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. 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 over £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.