Covid-19 has forced employers to look differently at the celebration of Christmas in the workplace. This has required employers not only to be innovative but also to be wary of the UK employment tax implications of providing gifts and/or holding events for their employees. As a general rule, the trivial benefit and annual parties and functions exemptions should exempt these items from UK PAYE and NICs (subject to conditions). HMRC has helpfully confirmed that the existing exemption for annual parties can apply to virtual ones, subject to the usual conditions. Nonetheless, care should be taken over employee communications, the method of payment, the nature of the gift, the structure of the event and the underlying purpose for the event being held or gift being given, as this can fundamentally impact its tax treatment.
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Covid-19 has forced employers to look differently at the celebration of Christmas in the workplace. This has required employers not only to be innovative but also to be wary of the UK employment tax implications of providing gifts and/or holding events for their employees. As a general rule, the trivial benefit and annual parties and functions exemptions should exempt these items from UK PAYE and NICs (subject to conditions). HMRC has helpfully confirmed that the existing exemption for annual parties can apply to virtual ones, subject to the usual conditions. Nonetheless, care should be taken over employee communications, the method of payment, the nature of the gift, the structure of the event and the underlying purpose for the event being held or gift being given, as this can fundamentally impact its tax treatment.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
