Tax Free Gifts For Staff On Christmas

Tax Free Gifts For Staff On Christmas. The employers who are looking to give their employees a small token of appreciation for Christmas, then their best option is probably to give them a gift tax free gifts. In order to ensure that this is not a taxable gift, it is important to that the trivial benefits in kind (BiK) rules apply.

If the gift doesn’t have a direct cash value then HMRC might accept it as a ‘trivial benefit’

The trivial benefits in kind (BiK) exemption applies to small non-cash benefits like a bottle of wine or a bouquet of flowers given to employees or any other benefit in kind classed as ‘trivial’ that falls within the exemption.

There is no tax to pay on trivial benefits in kind (BiK) provided to employees where all of the following apply:

https://www.gov.uk/expenses-and-benefits-trivial-benefits

• the benefit is not cash or a cash-voucher; and
• costs £50 or less; and
• is not provided as part of a salary sacrifice or other contractual arrangement; and
• is not provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.

So, for example a turkey that cost £45 would qualify as would a £15 bottle of wine. It is also possible to provide employees with a gift voucher (not a cash-voucher) where the value is £50 or less. It is important to remember that the gifts must not be provided in recognition of the employees’ services but merely as a gesture of goodwill at Christmas.

There is an annual cap for directors of a ‘close’ company of £300 per year. If the Christmas gifts have a value of over £50 or cannot be counted as a trivial benefit then the gift must be reported on form P11D and Class 1A NICs will be payable on the value of the gift.

If you are looking to know about it, feel free to contact us.