In an environment where most employee 'perks' are subject to tax it may be helpful for you as an employer to be aware of the few concessions that have been made by HMRC.
Long service awards
Long service awards are allowed within strict limits. There will be no tax charge so long as the employee has been with you for at least 20 years and the article given has a value not exceeding £50 for each year of service.
Suggestion scheme awards
Such awards must be made under a properly constituted suggestion scheme, based on a set percentage of the expected financial benefit to your business. The maximum award allowed is £5,000. There is also a concession for 'encouragement awards' of £25 or less to reflect meritorious effort on the part of the employee concerned.
Staff annual functions (e.g. a dinner dance or Christmas party) are tax-free where the total cost per person attending is not more than £150 per year (including VAT).
Such items are normally purchased for advertising purposes and must display a 'conspicuous advertisement'. Staff may receive promotional gifts tax-free provided that the overall cost of the articles involved does not exceed £50 per person per year.
Gifts of food, drink, tobacco or vouchers are specifically excluded.
For further details of other non taxable benefits see "Benefits in kind & Expenses payments".
Trivial gifts are now exempt from tax up to a vale of £50 per gift. This would apply to gifts such as Christmas gifts. It is also possible to use the exemption to provide flu vaccinations for staff and similar arrangements, provided the benefit is not a voucher or a reward for doing their job.
A cash benefit, or a voucher however, is always taxable irrespective of the value.
Owner managers are further subject to an annual cap of £300 on gifts to themselves or employees who are members of their family.
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