No one could have anticipated the events of 2020, and for your employees, it is likely that this has been one of the most challenging years in their career. With this in mind, if you are searching for ways to thank your staff for their hard work throughout the pandemic, then you can purchase surprise gifts tax-free!

How To Celebrate Christmas & Save Money!

You are now able to issue gifts to your employees without being taxed, providing that it is not cash or a cash voucher and does not exceed £50 per person; these are called ‘trivial gifts’. Trivial gifts should be given as a way to thank your staff for their contributions and should not be given in return for their standard service or as a contractual entitlement.

For employees who are not a director or their family members, there is no limit to how many trivial gifts that an employer can issue throughout the year. However, it is important to keep in mind that should you give a gift card, for example, and continue to top it up throughout the year, this cannot exceed £50 as it will be counted as one gift. Trivial gifts to directors and their family members are subject to an annual cap of £300.

As COVID-19 restrictions continue, physical Christmas parties have become impossible, which means that companies are turning to virtual alternatives. Virtual parties will qualify as an annual staff event, just like your typical Christmas celebrations would, which means that you can spend up to £150 per person tax-free. It is essential to ensure that you do not exceed this limit as it will become taxable and subject to NIC.