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If you have purchased your employees a seasonal gift, you might like to know what criteria you need to meet to ensure the gift can be exempt from tax.

  • The cost of the gift must be £50 or less per employee, or on average where gifts are given to multiple employees. If the gift is more than £50 then the full amount will be taxed, and not just the amount over the limit.
  • The gift must not be cash or a voucher.
  • The gift must not be as part of a contractual agreement or made under salary sacrifice.
  • The gift must not be given in recognition of a service or in relation to their general employment duties. In circumstances where the employer is a ‘close’ company and the gift is for a Director, office holder or a member of their family, then the exemption can be for no more than £300 in a tax year.

Further information is available on the HMRC website, but if you are unsure please speak with us for more guidance over tax effective incentives for you employees.