Katie De Niese: ‘Tis the season to be Jolly’

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It’s that time of year again, where your employees start to get into the festive spirit.

Suddenly the number of parcels being delivered to the office increases, in both volume and size.  Office talk moves on to secret Santa and nights out.  Before you know it, someone will have decorated the Christmas tree quicker than you can say ‘Bah Humbug’.

Let them know you care

One way of remunerating your staff at little cost to the company, would be to consider the possibility of ‘gifts for employees’. The good news is that it is now, thanks to H M Revenue & Customs, much easier to make gifts to your employees.

Since April 6, 2016, you can make gifts to your employees up to a value of £50, with no tax consequences. The only criteria being that the gifts must not be cash or a cash voucher, and the gifts must not be contractual.

In years gone by, employers used to provide employees with a turkey each, or a bottle of wine, but as H M Revenue & Customs tightened the rules surrounding this, the cost of a £50 turkey, could actually end up costing the employer almost £95.  It is no surprise therefore, that employers simply stopped making gifts.

Now may be the time to reconsider and say, splash out on something more than a mince pie and a piece of fruit!

A festive affair

The exemption which has been around for some time now, in H M Revenue & Customs terms, is quite generous.

Providing a number of criteria are met, you can spend up to £150 per head on an annual staff Christmas party and the amount will be exempt from both Income Tax and National Insurance.

The £150 needs to cover all costs, which can include food, accommodation and transport – the party has to be available to all staff and it has to be an ‘annual function’. The fun doesn’t stop there, note I said £150 per head; this is because the exemption also applies to all attendees so your partner or spouse can be included.

Both the introduction of the new ‘trivial benefit’ legislation and the continuity of the £150 staff party exemption, would suggest to me that at least one H M Revenue & Customs Inspector is a fan of Saint Nicholas!

If you would like to spread some Christmas Cheer amongst your staff and would like further advice on the provision of gifts or staff parties, please email [email protected].

Katie De Niese is Assistant Tax Manager, responsible for a portfolio of 150 clients and over 100 Employee Benefit Trusts.

She specialises in PAYE reviews, PAYE enquiries, P11Ds and PAYE compliance together with the establishment of Employee Benefit Trusts, both offshore and onshore. In addition, Katie is one of the main points of contact for IR35 queries, CIS status, compromise agreements and redundancy issues.