by Mel Hackney.

There are many ways to reward employees in a tax efficient way, and even though some of these can be complex, such as share option schemes, there are other ways of providing tax efficient or tax-free benefits which are very simple and often overlooked.

From 6 April 2016, there is a statutory exemption in place for trivial benefits, which is particularly topical this time of year. There are various conditions in place which need to be met for these to be non-taxable; one of which is that the gift must be less than £50 and not cash or vouchers. HMRC gives some examples on their website of items such as gifts of chocolates and wine at Christmas. You can even gift your employees with a Christmas turkey, so long as it’s under £50!

Something for both employers and employees to watch out for are the tax rules that surround items such as the Christmas party. No benefit arises on this so long as the cost per head does not exceed £150, but if this is exceeded (and other staff functions also need to be considered when determining this), a taxable benefit and reporting requirements could arise.

There are many other ways of rewarding your employees in a tax efficient way, and we can provide guidance to you of how you can achieve this, tailoring this advice to the nature and size of your organisation.

For more details please contact Mel Hackney.