The time of year is approaching when employers like to show their appreciation to staff for their work during the year. So a review of the rules to follow when making gifts in order to avoid an unexpected tax bill is worth considering.
The main rule is that the cost of a gift per employee should not exceed £50 and cannot be cash or a cash voucher (e.g. M&S, John Lewis vouchers). Also it must not be expressed to be in recognition of specific good performance and should not therefore be different for different people.
So can the directors also benefit from this? – the answer is yes, but within limits. Where the company is a typical ‘family-owned’ SME, the owner directors and their family / household can together only receive £300 of ‘benefits’ in each tax year.
For more information on this topic, please contact one of our team on 01273 701200 or firstname.lastname@example.org
Author: Peter Hedgethorne, Director