Navigating tax-free employee gifts part 2

As we approach the end of the year, it’s a time when many businesses will be thinking of making gifts to their employees.

It’s a great time to show those who work for you that you care about them and appreciate what they do. The good news is that it’s possible for these gifts to be tax-free! Gift vouchers may qualify as a trivial benefit if they are not exchangeable for cash, however, gift cards are more likely to meet the criteria.

There are many traditional gift options, but some of these may not be so easy for remote workers, so we’ve included some suggestions with links to websites to save you time. But these are only a few suggestions, there are plenty of other options out there too! You can view our Q&As on tax-free gifts here.

E-Gift Cards An e-gift card is just the same as giving your staff a physical gift card, the only difference is that it will be sent to their email address. 

The Rules: 
To make a tax-free gift of an e-gift card to an employee, you must follow the below guidance:

• The gift card cannot be worth any more than £50.
• The gift card/voucher cannot be one that can be exchanged for cash.
• It must be a genuine gift - if it is a performance-related reward then it is taxable. 

Examples:

• Why not give your employees a little luxury and send them a White Company e-gift card? You can add your personal message to this card, and it can be set to be delivered on a certain date (ideal for a birthday!)
• If you know they like their wine – why not try a Laithwaites e-gift card?
• Try a B&Q e-gift card – for DIY enthusiasts!
• If they like their sports and keep fit – try a Sports Direct e-gift card.
• Cadbury e-gift card – you can’t usually go wrong with chocolate! Again, you can schedule this to be sent on a specific date.

Useful tip: Tell your staff when you’ve sent them an e-gift card so that they know when they receive the email that it’s genuine and not spam! 

Deliveries to the doorMost retailers offer delivery of gift items. So you could choose an actual gift to be delivered safely to employees working remotely.

The Rules:  
Ensure these deliveries fall under the ‘tax-free gift’ category by following the below guidance:

• No more than £50 value per gift. 
• The gift cannot be one that can be exchanged for cash.
• Must be a genuine gift – not a reward for performance.

Examples:

• Interflora is a well-known favourite for flower deliveries, and there are some options below £50! (You may need to check availability in your area).
• Amazon has a useful Giftfinder where you can put in personal preferences of who you are buying for and your budget and it will suggest options that may work for them!
• Pizza Hut  Get a pizza delivered to the door in time for lunch!
• KFC delivers to the door via Uber Eats, Deliveroo or Just Eat.
• Marks & Spencer offers a range of hampers and gift options under £50.

With years of experience in taxation, we can work with you to clarify your goals, and formulate a clear plan for you, giving you inspiration and direction to help you maximise your growth potential. Get in touch with the team at Oldfield via  info@oldfieldadvisory.com or call 02476673160 and we will be happy to advise on the best solutions for your business.

Please note: This article is provided for information only and was correct as at time of writing (17/10/23). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance.  No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.