Business Newsletters - Winter 2007

Seasonal gifts

So you want to give your employees a present to reward them for their hard work. Perhaps you were thinking of a bottle of something, some chocolates or even a turkey - but are there any tax implications?

HMRC allow you to give minor gifts to employees, for example flowers to an employee who is in hospital, without having to report this as a perk of the employee’s job through the benefits in kind system. However, where all employees are receiving a gift, the employer may need to report the gifts. If the form P11D is used, which reports employees’ benefits, the employees will end up paying tax on the value of the gift. This may not be the best way of dealing with this issue as the tax charge may leave a nasty taste. Would you want to pay tax on a gift?

Alternatively the employer can pay the tax on the gift using a PAYE settlement agreement. Do get in touch if you would like to know more about this.

Top of page

Print Page