Gift giving and tax

This time of year we need to consider gift giving and tax. It is easy during the Christmas period to to be  generous, but most of us feel we are quite generous enough to the taxman during the rest of the year.

If you run a business, there are different rules depending on the type of gift you give. You can find the regulations here.

Business giving

As an employer providing gifts to your employees, you have certain tax, National Insurance and reporting obligations.

A Christmas bonus will be taxed, but if you give a gift, the rules are not so clear. Depending on the value of the gift, the employee may still get taxed on the value of the gift as a benefit in kind, and you may have to pay Class 1A NI.

The Taxman does consider some small items to be trivial benefits which can be given as tax-free gifts to staff. These can include seasonal gifts such as a turkey, a bottle of wine, or a box of chocolates.

If you are feeling extra generous this Christmas and intend to give larger gifts to your staff, then you can pay the tax and NI due on the cost of the gift, on behalf of the employee, through a PSA (PAYE Settlement Agreement) with the tax office.

Need more information?

We offer a wide range of services which are unique to your business and can help during the Christmas period. Gift giving and tax is complex and we are here to help. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

Our fantastic team at A&C Chartered Accountants are here to help.

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