Can I give my employee a gift for Christmas?

You may considering giving employees a gift for Christmas to say thank you for the hard work during the year.

It will probably not come as a great surprise to hear that the Tax Man tends to have something to say on Christmas Gifts to employees.

Cash and Gift Vouchers

If you are considering either of these, they are taxable.  Your simplest solution for a cash gift is simply to add it to payroll salary for the month of December and let it be taxed along side normal salary payment.

A Small Gift

Perhaps you are thinking of giving your employees a bottle of wine or box of chocolates.  HMRC will not seek to tax these small gifts, as long as they are of reasonable value.  Unfortunately HMRC does not actually define ‘reasonable value’.  So our freelancers suggest sticking with a sensible value of around £50.

Merry TAXmas!