Seasonal Gifts to Employees
It’s the time of year for festive cheer, so how about sharing this with your employees?
Perhaps you would like to reward your employees for their work over the past year with
a bottle
of something, or some chocolates,
or even a turkey!
But, what are the tax implications
if you do this?
HMRC allow you to give specific ‘trivial’ gifts to employees without having to report them as a perk of the employee’s job through the benefits in kind system.
Examples of trivial gifts are:
- Small gifts i.e. flowers, in recognition of a particular event e.g. an employee’s marriage or birth of a child. This must not be a reward for services.
- Seasonal gifts, i.e. a turkey, bottle of wine or a box of chocolates at Christmas, or an egg at Easter.
For employers with large numbers of employees the total cost of providing these gifts may be considerable but where the cost of the gift to each employee is small there should be no tax implications.
You must be aware that if the gift extends from a bottle of wine to a case, or from a turkey to a Christmas hamper, there may be tax implications therefore you should seek tax advice first.
Vouchers given to staff members have immediate tax and national insurance implications therefore you must advise us if vouchers have been, or are to be, provided.
Gifts that are subject to tax must be reported on Form P11D and the tax paid by the employee. Alternatively the employer can pay the tax on the gift using a PAYE settlement agreement.