Further to my recent article regarding the tax implications of providing Christmas functions for staff, another area for consideration with the upcoming festive season will be the provision of Christmas gifts or bonuses to staff.
Many firms will provide a Christmas bonus to staff. Often this will be in cash which will be taxable and will normally be processed through the payroll.
From 2016, there is no taxation on the benefit in kind if the following conditions are met:
- The benefit in kind cost £50 or less to provide.
- It is not cash or a cash voucher.
- It is not provided in return for work or performance.
- It is not in the terms of their contract.
Directors of close companies can only receive
The cost of the gift will normally be a tax
In addition to making gifts to employees, a business may also choose to make gifts to customers and business contacts.
- It is an item containing an advert for the business.
- It costs less than £50.
- It does not comprise
oftobacco, food, or drink.
Normally, relevant businesses will be able to reclaim the input VAT on the cost of business gifts. However, if the gift costs in excess of £50 or
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.