Q: As an employer, I am thinking of giving gifts to my employees this Christmas. I am trying to decide between giving them a cash bonus of £30 or a Christmas Turkey. What would the tax implications of these gifts be?
A: If you decide to give your employees a cash bonus, this will be treated as taxable income and subject to tax and national insurance the same as other earnings.
Alternatively, if you decide on giving a Christmas turkey to your staff, this will be exempt from any tax or national insurance payments. This is because it is classed as a trivial benefit. If a gift meets the following conditions, HMRC will normally accept that it is trivial:
– There is a low cost in providing the gift
– The gift is for general welfare purposes
– The cost in administering the tax and NIC is disproportionate to the value of the tax/NIC.
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