In the run up to Christmas we at Jack Ross thought we’d give you a few hints and tips about tax efficient benefits for your employees.
Most employers are aware of the “Christmas Party Exemption “, which isn’t restricted to Christmas but does have to be an annual event. Provided the cost of annual event doesn’t exceed £150 per head per year it’s fully covered; tax deduction for you, and no benefit in kind for the workers.
April 2016 brought in new rules for other trivial benefits. There is no annual requirement, and it covers small non-cash gifts, eg, flowers, wine, meals etc. Unlike the Christmas party it doesn’t have to be available to the whole workforce and provided:
- It doesn’t exceed £50 per head/unit cost
- Isn’t a reward for work (so not a bonus or thank you for hitting targets)
- Not part of the employees’ contract.
It’s totally TAX FREE for the employee. Best use of this is probably to take staff out for a birthday meal, remember you can’t give them cash to pay for it though. You can also send them flowers, wine and other small gifts when they’re ill, have a baby, get married etc.
Unfortunately there is a £300 per year restriction on this for directors and officers of close companies.
To discuss this further please contact us on either 0800 020 9542 or email us on firstname.lastname@example.org.