Tax Free Turkey's
Want to give an incredible gift and save money too? Choose the Lifestyle Gift Card!
While employees may be looking forward to the idea of a Christmas bonus, cash (or money added to payroll) is not considered to be exempt for taxation purposes and that means there is a tax burden. Either you pay the extra, or the employee won’t get the full amount! To give an example, if you give £50 into a pay packet, this comes back after NI and tax as a paltry £36 for employees. Not very festive!
Instead, by saying yes to giving an approved trivial benefit, such as a £50 Lifestyle Gift Card, which HMRC recognises as allowed, your employees get the value of the whole £50, to spend on 250+ quality brands. They can buy essentials, presents or even turkeys!
We've explained all the details on trivial benefits here so you can pick up that perfect tax free Christmas treat for your team.
Use our Tax Savings calculator to see how much you could save!
Simply input your team size and your gift value (up to £50 according to HMRC rules) and watch the savings soar.
So what is a trivial benefit?
A tax-free Christmas gift is sometimes referred to as trivial benefits, or benefits in kind - but in short, it’s the perk that the HMRC allows so employers can give something small, like food, chocolates, wine or even a turkey as an ‘allowable expense’.
In short, it’s not declared, and you can offset it against your tax bill. It’s a super way to stretch that budget, because the fact is - cash isn’t kind.*
*For more information on trivial benefits, visit Gov.uk.
Tax Free Turkey's
Holiday gifting for employees: What are the trivial benefits rules?
- The amount giftable before bing subject to taxation for both the employer and the employee is £50*.
- Any benefit given/received is not cash or cash voucher.
- It cannot be a contractual obligation or payment for performance or job duties.
- If you are a limited or close company gifting, your benefits cannot exceed £300 in the fiscal year.
These rules for exception also apply by extension to any family member of an employee and any outsourced third-party services.
Tax Free Turkey's
The benefits to the employer
- It is tax free - so it's much cheaper than paying cash through the payroll - 60% cheaper!
- It is much more memorable and rewarding than cash - rather than getting lost in the pay slip
- The gifts can be personalised and flexible
- It's easy to organise, deliver and we manage all the administration
The savings -v- cash
Any cash payment made to an employee is subject to tax and national insurance contributions.
Using the trivial benefits exemption* a £50 gift card costs the employer £50 and the employee gets £50 of value. Whereas £50 paid through payroll would cost the employer £56.90 (after employer NIC's) and for a basic rate taxpayer would be worth £34 after tax and NI. Less for higher rate taxpayers.
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Choose vouchers from over 250 of the UK’s best-loved brands.
Including the UK's top retailers, cinemas, holidays and more than 16,000 dining and pub venues.
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We're here to help
Need more information? Need help with a voucher you've received? Want help using Lifestyle for your business?
Whatever it is, we're here to help and we'd love to hear from you.
Drop us a message to sales.team@motivates.co.uk