At this time of year it may be traditional to consider providing your employees with a Christmas or seasonal gift. We would like to remind you of your obligations as an employer.
If you provide a Christmas present paid in cash, it will always be taxable, the same as other earnings. The same treatment also applies to vouchers that can be spent in either one or a number of different shops of the employee’s choice. The employee is liable to pay tax on the full value of the voucher.
If employees are given a seasonal present, such as a turkey, an ‘ordinary’ bottle of wine or a box of chocolates, we will not seek to tax it as long as the cost is reasonable.
If the gift is substantial, it should either be entered on a P11D for the employee to pay tax on it or you can enter into a Paye Settlement Agreement and pay the tax on behalf of the employee.
If you would like further information on how to proceed with gifts at Christmas call us on 020 8903 9538.