With Christmas fast approaching some employers may consider making small gifts to their employees. A tax exemption is available which should give employers certainty that the benefits provided are exempt and do not result in a reportable employee benefit in kind. In order for the benefit to be exempt it must meet the following conditions:
The cost of providing the benefit should not exceed £50 per employee.
The benefit cannot be cash or a cash voucher.
The employee is not entitled to the voucher as part of a contractual arrangement (including salary sacrifice).
The benefit is not provided in recognition of particular services performed by the employee as part of their employment duties.
Where the employer is a ‘close’ company and the benefit is provided to an individual who is a director, an office holder or a member of the household or their family, then the exemption is capped at a total cost of £300 in a tax year.
If you are not sure, or would like to confirm whether the gift you are considering is covered by the exemption please contact –
Andy Summers, Rugby 01788 539000 or Jon Kicks, Leicester 0116 261 0061