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Gifts


Produced by Tolley in association with
Employment Tax
Guidance

Gifts


Produced by Tolley in association with
Employment Tax
Guidance
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Introduction

Employers may make gifts to an employee for various reasons. The amount incurred by the employer in respect of the gift to the employee is taxable unless it qualifies for a particular exemption from tax, such as the exemptions for certain trivial benefits or long service awards.

The Christmas bonus / gift to employees and Long service awards guidance notes provide more detail on Christmas gifts and long service awards. Other categories of non-taxable business gifts are discussed below.

If the employer provides a gift by way of voucher, see the Vouchers guidance note for more information.

HMRC guidance is at EIM01450.

Tax treatment

The tax treatment of a taxable gift made to an employee is determined by the nature of the gift and the method of that provision.

Cash or money’s worth

A gift of cash or money’s worth is taxable as earnings and should be included in payroll and subject to tax and Class 1A NIC.

If the gift is in the form of a cash voucher or similar then this will also be

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Philip Rutherford
Philip Rutherford

Senior Tax Director at Molson Coors Brewing Company

Phil is the Senior Tax Director for Molson Coors' European operations. He has responsibility for both direct and indirect taxes across both EU and non-EU states. Prior to this, Phil was responsible for Molson Coors UK tax affairs covering all major taxes and duties.   Phil trained at KPMG LLP, where he worked for 8 years, specialising in tax investigations across both direct and indirect tax.

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  • 22 Nov 2022 07:02

Home/ Tolley Tax Guidance/ Employment Tax / Providing benefits to employees

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