Giving a gift to your employees could be high on your priority list this festive season. But if a gift leaves your employees with a tax and national insurance bill they’re not likely to feel the goodwill you were intending.
Since April 2016 HMRC have given an exemption that allows employers to give a ‘trivial’ gift to employees without the need to report on a P11D or PSA (PAYE settlement agreement) hence negating any tax or NI liability. So what rules to do we need to consider when choosing this year’s Christmas gifts;
- Not exceed the value of £50
- Not be in return for salary sacrifice
- Not be in recognition for an employee’s normal duties
- Not cash or a voucher that can be exchanged for cash (a non-cash voucher would be ok!)
- Not exceed a total of £300 per director or family member of a director within a tax year