As the festive season approaches, it is worth knowing what you must report to HMRC and ways you can save tax. You have the ability to gift your team benefits-in-kind tax-free. The new simplified gifting rule was introduced in April 2016. Certain tax benefits-in-kind do not need to be reported to HMRC.
For the gift to be tax-free and not have to be reported to HMRC it must not:
- exceed £50
- be cash or a cash cheque
- be entitled to the benefit as a contractual obligation such as a salary sacrifice
- be provided in recognition of service provided that would be considered ‘part of their job’
So generally, the exception will apply to fund drink and shop gift vouchers, flowers, chocolates etc. These gifts generally apply for birthdays, Christmas and other ‘holidays’.
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