The tree is up, the jumpers are festive, and we are starting to turn our thoughts to Christmas once again!

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

Employees can receive small gifts tax free. 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. Examples could include items such as gifts of chocolates at Christmas.

Something for both employers and employees to watch out for are the tax rules that surround items such as the Christmas party. No tax on the cost of the party arises so long as the amount 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 throughout the year, and we can provide guidance to you of how you can achieve this, tailoring this advice to the nature and size of your organisation.