‘TIS THE SEASON

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Gerry MacCrossan

‘TIS THE SEASON


HMRC are not the Grinch after all. They have recently announced that employers may arrange a virtual Christmas party this year and there will be no taxable benefit for employees provided that all staff are invited and the cost per head does not exceed the normal £150 limit.

CHRISTMAS GIFTS OF UP TO £50 TO EMPLOYEES

Remember that certain gifts to staff at Christmas are also tax-free if structured correctly. Employers can provide their directors and employees with certain ‘trivial’ benefits in kind tax-free. This exemption applies to small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers. There are of course several conditions that need to be satisfied to qualify for the exemption.

Conditions for the exemption to apply

  • The cost of providing the benefit does not exceed £50.
  • The benefit is not cash or a cash voucher.
  • The employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme.
  • The benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services).