How about a virtual Christmas party?

As we approach that time of year when firms would usually be enjoying office Christmas parties, the tier restrictions have really put a dampener on spirits. How can you increase staff morale in such difficult times?

HMRC are not the Grinch after all. They have recently announced that employers may arrange a “virtual” Christmas party this year and there will be no taxable benefit for employees provided that all staff are invited and the cost per head does not exceed the normal £150 limit.

The practicalities of this however remain a mystery. Maybe keep it to a modest affair and let’s have a big bash when the Coronavirus pandemic is over as we are allowed more than one event a year within the £150 limit.

Christmas gifts of up to £50 to employees

Remember that certain gifts to staff at Christmas are also tax free if structured correctly. Employers are allowed to provide their directors and employees with certain “trivial” benefits in kind tax free.

This exemption applies to small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers. There are of course a number of conditions that need to be satisfied to qualify for the exemption:

• the cost of providing the benefit does not exceed £50
• the benefit is not cash or a cash voucher
• the employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme
• the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)

For further information on gifts for employees, please contact Gemma Hedges on 023 8046 1259.