So summer is already a distant memory and those nights are certainly drawing in a lot faster than we ever remembered, Christmas is just around the corner and you are probably already thinking about the parties and presents that always feature in the festive season. But remember that HMRC are not all bad because there are rather tasty tax free allowances that will not only save you a few quid on your tax return but will also contribute to boosting the workforce moral to boot. Here we run over the current rules with regards to tax free gifting at Christmas.
Gifting your staff
Why not reward your brilliant staff this Christmas and make them feel valued! In terms of negating any tax on these items, they must be regarded as “trivial gifts”. Although that term may sound a little bland, we are talking about the following products here:
• Bottle of wine
• Box of chocolates
• Other small gifts
Be careful not to overstep the mark though because cash gifts or larger presents will be taxable and can cost you more than you originally thought. If you are in any doubt as to what is and what isn’t taxable this Christmas please get in touch with our accountants at David Cutter who will be more than happy to discuss this further with you.
Gifting your clients
Okay, HMRC are a little more lenient when it comes to presenting your clients with a worthwhile Christmas present. They allow for £50 every year but they are a little more specific so don’t rush out and buy the first thing that comes into your head, the following are always taxable:
• Any alcohol
• Food related items
• Any form of tobacco
• Vouchers that can be used for any of the above
Even the wrapping paper must be accounted for so hold back as far as that high end gold packaging is concerned.
David Cutter are here to help so if you need some advice about how to reward your staff this Christmas, thank your clients or any other tax related issues, we’d be more than delighted to speak to you at your convenience. You can offer your staff rewards based on their performance and these can have a value of up to £25 tax free. Free catering is another option and we’ll explain the other ways that you can say thanks to your valued staff without attracting any tax.