Christmas Gifts for Employees

Christmas Gifts for Employees

Christmas is coming and it’s likely to have been a tough year for many people, their business if they operate one and their teams. As normality returns, there are still some ongoing challenges such as social distancing, masks, lateral flow tests and more. So, you may be wondering about how you can reward your employees with Christmas gifts as a thank-you for their hard work throughout the year.

This blog post will tell you lots about Christmas gifts for employees and what you need to know. If you have any further queries about your festive finances or Christmas treats for your team, just drop us a line. We will happily give you more personalised or in-depth advice.

  • Cash Bonuses or Vouchers

If you were to give your employees a Christmas present in the form of cash, then this would be taxable as earnings in the normal way. This means it would be subject to both tax and national insurance. This also applies to vouchers that can be exchanged for cash. The employee will be taxed on the full value of the voucher.

Non-cash vouchers that are exchangeable for goods and services only will also be taxable. They must be reported on the employees P11D form. Class 1 National Insurance will normally be needed to be deducted through payroll. It is essential your payroll manager or accountant is aware of this so it can be reported correctly to HMRC.

  • Christmas Gifts

If you choose to give your employees a seasonal present such as a bottle of bubbly, a box of chocolates or similar, then this needs to be below the value of £50 per employee. It is then classed as ‘trivial’, and the employee will not be taxed. If the Christmas gift was to exceed this amount, then it will be taxable and HMRC will need to know.

  • Third Parties

If your employees do a great job, they may be given a gift from a third party. As long as the value of the Christmas gift does not exceed £250 in cost, then this is not taxable for the employee. If it is over this amount, then it is taxable and HMRC should be aware.

  • Christmas Parties

Staff entertaining can be an allowable business cost where this solely relates to your employee’s. The expenditure must be wholly and exclusively for the purposes of your business and does not necessarily need reporting to HMRC if the event is open to all your employees, be annual, such as a Christmas party (or Summer BBQ for example) and cost £150 or less per person. The allowance can be split across a number of events, as long as the combined costs does not exceed £150 per head.

  • Director benefits

A close company is one that is run by 5 or less shareholders. As a director you can receive trivial benefits up to a value of £300 in a tax year without the necessity to report these to HMRC or pay additional income tax or National Insurance on the benefit.

Remember receipts should be kept for all trivial benefits and the annual allowance can cover benefits provided to a family member or a member of your household and still be exempt.

If the exempt limits are exceeded, even by a small amount, the total value of the benefit – and not just the excess – will have to be taxed through the payroll or reported on a form P11D.

Are you still unsure of the best way to thank your employees for their hard work this Christmas? Give our team a call. We can talk through some options with you that offer the best outcome for you and your employees.

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Our decision to choose the services AK Book-keeping and Payroll Services has turned out to be a really important enabler to the growth of our business and has delivered us fantastic value for money. Their accuracy and efficiency in compiling our accounts and payroll documents has allowed us to focus on the things which we do well and add real value whilst removing the distraction of unwanted and complex administration work. I would recommend them without hesitation.

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Our decision to choose the services AK Book-keeping and Payroll Services has turned out to be a really important enabler to the growth of our business and has delivered us fantastic value for money. Their accuracy and efficiency in compiling our accounts and payroll documents has allowed us to focus on the things which we do well and add real value whilst removing the distraction of unwanted and complex administration work. I would recommend them without hesitation.

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I Periodically review my resources (like any business should) and on each and every occasion I have decided to retain AK Bookkeeping’s services. It’s one of those business I know I can depend on.

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We engaged AK Book-keeping some two and a half years ago, from the outset their communication has been excellent. We were provided with a schedule of monthly costs and a clear indication of what was included. To date we have had no reason to consider changing from AK Book-keeping as their service has been reliable, efficient and cost effective.

AK Book-keeping introduced us to Xero accounting system from the outset and for a reasonable monthly fee we benefit from all the Xero facilities available and have access to view our account, use data and monitor our performance and it is all relatively simple. We would recommend AK Book-keeping and the Xero system.

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We engaged AK Book-keeping some two and a half years ago, from the outset their communication has been excellent. We were provided with a schedule of monthly costs and a clear indication of what was included. To date we have had no reason to consider changing from AK Book-keeping as their service has been reliable, efficient and cost effective. AK Book-keeping introduced us to Xero accounting system from the outset and for a reasonable monthly fee we benefit from all the Xero facilities available and have access to view our account, use data and monitor our performance and it is all relatively simple. We would recommend AK Book-keeping and the Xero system.

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Les has worked with us for 12 years now and supported our Bookkeeping and Payroll needs. Always helpful, cheerful and gets the job done efficiently. When required has helped us with other business related issues outside of Bookkeeping.

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Les has worked with us for 12 years now and supported our bookkeeping and payroll needs. Always helpful and cheerful and gets the job done efficiently. When required has helped us with other business related issues outside of bookkeeping.
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2018-09-19T18:24:06+01:00
Les has worked with us for 12 years now and supported our bookkeeping and payroll needs. Always helpful and cheerful and gets the job done efficiently. When required has helped us with other business related issues outside of bookkeeping.
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