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As inevitable as Monday morning casting its gloomy shadow over a chilled Sunday afternoon, buying and sending staff gifts raises a few questions about tax.
The good news is, it's really not that scary 👻.
Here's our guide to what you need to know...
Whilst we’ve done everything we can to ensure the information in this article is accurate and complete, please don’t treat it as professional legal or tax advice. You must always seek your own professional guidance if you are in any doubt about your specific situation.
Say hurrah as almost all the gifts we sell fall within the threshold for HMRC's trivial benefits treatment. This means that they don’t attract Benefit in Kind tax or National Insurance costs for either the employer or the employee. High fives all-round 🙌.
In real terms, this means purchasing staff gifts rarely incurs any additional or ‘hidden’ costs. For example, if staff gifting didn’t fall within the threshold mentioned above, a gift costing £50 would incur tax and NI additions that could add a further £48 on top of the price of the original gift - that’s a doozy of a saving and means your budget isn’t getting swallowed up by things that don’t put smiles on faces. 😀
Whilst it may seem a little too good to be true, there really aren’t any nasty surprises lurking in the small print. That being said, for the gift to fall within the trivial benefits threshold, there are a few things to keep in mind:
1. The gift cannot be cash or a cash voucher (don’t worry, gift cards are ok; see below) 💷
2. The gift must not be mentioned in the terms of the employee’s contract 📝
3. The gift must not be in return for work or performance. i.e Trivial benefits cannot be given as a bonus 🧑💻
4. The value of the gift must be no greater than £50 per person per instance (inclusive of VAT) 💰
5. For directors of ‘closed companies’, gifts must not exceed £300 in aggregate, per year 💰💰
Yep, you heard it right, HMRC doesn't treat gift cards as cash. This is because they are locked 🔐 to being spent at a particular retailer. So, providing the above conditions are met, gift cards are treated as a trivial benefit and therefore don’t incur BIK tax or NI, just like our other gifts 😎.
We understand that you may want some extra assurances (heck, we encourage it!) so you can find some more information straight from the horse’s mouth at these links:
See, that wasn’t too bad was it? Whilst tax isn’t likely to be the hot topic of conversation at your next social, at least you’re now armed to answer questions from the Accounts team. Wait for the look on their faces when you drop the line about “trivial benefit treatment”. 🖐🎤
Huggg's easy-to-use platform makes sending gifts at scale a cinch and handles all GDPR concerns effortlessly.
Huggg's easy-to-use platform makes sending gifts at scale a cinch and handles all GDPR concerns effortlessly.
