Gifts

Produced by Tolley in association with Philip Rutherford

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Gifts
  • Introduction
  • Tax treatment
  • Cash or money’s worth
  • Goods
  • Assets
  • Non-taxable gifts
  • More generally available business gifts
  • Gifts with conspicuous advertising
  • Gifts that are not ‘by reason of the employment’
  • More...

Gifts

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 taxable as if

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