It’s nearly Christmas!!!

Posted by on Dec 9, 2016 in News | 0 comments

                   Tax Free gifts from the company to its employees up to £50 (including VAT) for Christmas …..?

           Main rules summary below:

  • Must be a gift by the employer and must not be about rewarding for good work carried out (that is deemed to be “pay” in kind and taxable)
  • The gift must be up to £50 including VAT. If the gift is over £50 including VAT,  say £51, the whole  £51 is taxable (not just the excess)
  • The gift from the employer can include food and drink, but not cash or vouchers convertible to cash (Champagne, turkey, flowers  etc are fine)
  • The gifts must not be expected by staff as would then be deemed to be “pay”
  • Other points…
  • Can be any number of gifts to an employee (just need to have an occasion – birthday, New Year?)
  • Maximum total limit on gifts to a Director in a tax year is £300 including VAT (so please keep a record of the generosity to individual staff! )

 

          Annual Christmas party?  Annual year end party?

            Main rules summary:

  • Remember these can’t be regular events otherwise they are not “annual”
  • £150 including VAT per person maximum in a tax year . If more than £150 including VAT per person, the whole amount becomes taxable on the employee.
  • Event must be for all staff members

         Remember to contact your accountant to discuss your own particular circumstances