Min Read
November 10, 2021

Christmas gifts and tax

Helpful information to ensure your Christmas gift budget gets spent on the fun stuff.

Whilst unlikely to be found at the top of many Christmas lists, trivial benefits tax relief is one present you should be on the lookout for this year - especially if you're the one justifying the gift-buying budget.

Like with most things that involve spending money, there are certain tax implications to consider when sending gifts to staff. The good news is, by following some simple guidelines you can keep these considerations to a minimum by way of a tax relief known as trivial benefit treatment.

Our previous post covers the details of trivial benefits in full, but with it being the season of giving we thought a little reminder and some ideas about how to make the most of it might be of use this Christmas. Every little helps!

What are trivial benefits?

Apart from being a bit of a mouthful to say, the trivial benefits treatment is a form of tax relief that allows employers to send small gifts to employees without incurring National Insurance costs or Benefit in Kind tax. This is great when sending work Christmas gifts as it means no nasty surprises for you or your staff after the present has been sent and received.

What are the rules of trivial benefits?

If you want to benefit from the err… benefit, then there are four main points to keep in mind when buying work Christmas gifts:

  • The gift cannot be cash.
  • The gift must cost less than £50.
  • It cannot be mentioned in the employee’s contract.
  • It must not be given for good performance at work - Christmas presents are allowed though.

Providing you keep to these rules, there’s no need to declare your small gifts to HMRC. See not too taxing is it?

Ok, onto the fun stuff…

What Huggg gifts can I send to make use of the trivial benefit treatment?

We have options to suit budgets of all sizes but if you’re looking for great gifts under £50 that pack a punch, then boy have you come to the right place. You can check out the full range in our Christmas gift guide, but here are a few ideas to get you going starting from less than £2 ....

A festive drink from Greggs - £1.90

Warm hearts and cold hands with a hot drink from the nation’s favourite bakery.

A popcorn cracker - £10 inc postage

Start the festive indulgence with some delicious gourmet popcorn from Joe & Seph’s.

A countdown calendar - £25 inc postage

Mark each day leading up to the 25th with a tasty treat from Tony’s Chocolonely or Prestat.

Bloom & Wild starry night tree - £33 inc postage

Spread some Christmas magic with a mini-tree from Bloom & Wild. Decorations and pot included.

What about Christmas parties?

Thankfully HMRC know that their ain’t no party like a Christmas party and so they allow an exemption (not an allowance) of up to £150 per head for annual events. The event must be open to all members of staff and the amount must be divided amongst any other annual parties you have over the year. Be careful to not overspend as if you go over the £150 limit by even a small amount, the whole thing will be taxable.

There’s more good news as this exemption even applies to virtual “at home” parties. So make the most of our party packages and easy gifts to help your people celebrate from the comfort of their own front rooms/bedrooms/garage offices/kitchen worktops etc.

Is there anything else I should know?

We’ve done all we can to ensure the information is correct but things can change so please don’t treat the information in this article as legal advice on tax. Please make sure to seek your own professional guidance should you be unsure about your specific situation. HMRC are the experts here so please be sure to check out their guidance.

Check out some of our great team gifting options

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Huggg's easy-to-use platform makes sending gifts at scale a cinch and handles all GDPR concerns effortlessly.

Send team gifts in seconds

Huggg's easy-to-use platform makes sending gifts at scale a cinch and handles all GDPR concerns effortlessly.

Check out some of our great gifting options

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