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Rewarding Staff at Christmas

08-Dec-2017

Rewarding Staff at Christmas

Your staff have worked hard all year and this is the season, where you would like to acknowledge this by showing your gratitude in some way.  But how can you do this and ensure that you, or your staff do not get stung for tax or national insurance!

Christmas Bonuses

These should be processed through the payroll in the same way as salary, with tax and national insurance deducted at source.

Christmas Gifts to Staff

If these are less than £50 per head and are gifts or non-cash vouchers then there is no tax or national insurance due on these as HMRC will treat them as ‘trivial benefits’.  HMRC gives the example of an employee giving a £25 bottle of wine to each member of staff, with an alternative £25 voucher for a national supermarket chain for those who do not drink alcohol.  If, however, you exceed this figure of £50 per head, or if you provide vouchers exchangeable for cash, then the gift becomes a benefit in kind and subject to tax and National Insurance.

Christmas Meal or Party 

The limit for this is £150 per head per year for each employee and their partner (£300 for both) which includes transport to and from the event.  The conditions that must be met are that it should be an annual event, not a one-off, and all employees must be invited.  If the £150 limit is exceeded then the entire amount becomes a benefit in kind and subject to tax and National Insurance.

So go ahead and ensure you and your staff enjoy the festive season without any nasty surprises from the tax man!

If you need further help or advice regarding rewarding staff at Christmas, please contact us here at Bright Brown Accountants on 01983 523361.

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