Christmas Vouchers to Employees

Hi,

Our Director, in lieu of a Christmas party or a gift such as a bottle of wine or a turkey, has decided he will give employees a £30 Asda voucher each. It is not a reward for services, more a staff welfare, time of year gift.

I know that a trivial benefit could be for example a turkey and this would possibly not be P11D or PSA reportable.
However cash benefits, no matter how small, seem to be excluded from EIM21861.

I have looked through most of the "blurb" surrounding this, and it seems that having chosen vouchers it may cost the Company tax & NI under a PSA, whereas if he'd gone with a bottle of wine each we could have applied under EIM21861 to have the benefit treated as trivial.

Have I missed anything? It's not a specilaity of mine, and would appreciate any feedback of anyone that has encountered a similar situation.

Best wishes

Caroline

Comments

  • coojee
    coojee Experienced Mentor Registered Posts: 794
    CaroCrewe wrote: »
    Hi,

    Our Director, in lieu of a Christmas party or a gift such as a bottle of wine or a turkey, has decided he will give employees a £30 Asda voucher each. It is not a reward for services, more a staff welfare, time of year gift.

    I know that a trivial benefit could be for example a turkey and this would possibly not be P11D or PSA reportable.
    However cash benefits, no matter how small, seem to be excluded from EIM21861.

    I have looked through most of the "blurb" surrounding this, and it seems that having chosen vouchers it may cost the Company tax & NI under a PSA, whereas if he'd gone with a bottle of wine each we could have applied under EIM21861 to have the benefit treated as trivial.

    Have I missed anything? It's not a specilaity of mine, and would appreciate any feedback of anyone that has encountered a similar situation.

    Best wishes

    Caroline

    I don't know the answer for sure in this particular instance but I do know that M and S vouchers and Love2Shop vouchers are tax free as they can't be converted into cash. If these Asda ones can be converted to cash (and by that I mean you buy something with the vouchers, then return it and they give you cash back rather than a voucher or they give you cash change) then it should be taxable.
  • Donna Curling
    Donna Curling Feels At Home RingwoodRegistered Posts: 59
    Thanks for advise on vouchers - wasnt sure of the "convert into cash" details so will try and find out more information and pass on information to clients. Do you know if there is an HMRC thread confirming this? Great if there is.

    much appreciated.
    Donna Curling
    Donna Curling - AAT Tutor
    www.completebookkeeping.co.uk
  • coojee
    coojee Experienced Mentor Registered Posts: 794
    Thanks for advise on vouchers - wasnt sure of the "convert into cash" details so will try and find out more information and pass on information to clients. Do you know if there is an HMRC thread confirming this? Great if there is.

    much appreciated.
    Donna Curling

    Sorry, I don't know. I only know about the vouchers as my DH's work give them the option of M and S or Love2Shop every Christmas because they're not taxable.
  • Gem7321
    Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    See 'vouchers' http://www.hmrc.gov.uk/guidance/cwg2chapter5.pdf

    Vouchers which can be redeemed or exchanged for:
    • both goods and cash or cash alone
    • goods alone (but not readily convertible assets)
    • use of sporting or recreational facilities
    • readily convertible assets

    are subject to PAYE and NIC.

    I don't understand how the M&S/Love2shop are not taxable? Can you point me in the direction of the legislation?

    Do turkeys next year!
  • coojee
    coojee Experienced Mentor Registered Posts: 794
    Gem7321 wrote: »
    See 'vouchers' http://www.hmrc.gov.uk/guidance/cwg2chapter5.pdf

    Vouchers which can be redeemed or exchanged for:
    • both goods and cash or cash alone
    • goods alone (but not readily convertible assets)
    • use of sporting or recreational facilities
    • readily convertible assets

    are subject to PAYE and NIC.

    I don't understand how the M&S/Love2shop are not taxable? Can you point me in the direction of the legislation?

    Do turkeys next year!

    Interesting reading, I don't know how they get away with it then, maybe they're doing it wrong.
  • Gem7321
    Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    Maybe they're included on a PSA so the employee doesn't see the tax - they're still taxable but the employer is paying on the employee's behalf.
    LynWest
Privacy Policy