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Season of giving: The tax-free gifting option for employers

With less than two weeks to go until Christmas, you may be looking for some last minute ways to show appreciation for your team’s hard work throughout 2023. While many employers opt to pay their employees a bonus in their December payslip, some may want to give a physical gift or voucher instead (or as well!).

If you are choosing to give a physical gift or voucher, then you may not have to pay tax on it, should it qualify as a ‘trivial benefit’.

Trivial benefits are tax-free, providing that:

  • it cost you £50 or less to provide
  • it isn’t cash or a cash voucher (e.g., premium bonds)
  • it isn’t a reward for their work or performance
  • it isn’t in the terms of their contract.

To qualify as trivial, the gift must satisfy all of the criteria – if it doesn’t, then you will have to pay tax on it. If you do choose to give your employees a bonus or non-trivial benefit, then you will need to submit it with your payroll data so that it can be included on their payslip.

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