“We make a living by what we get, but we make a life by what we give”. Winston Churchill
Christmas is nearly upon us – it is traditionally a time to think of those we care for and show them how much they mean to us.
This time of year is a great time to reward your staff for their hard work over the last year. These rewards don’t have to be massive – but I can attest as a member of staff how much these things mean to me.
The following are five usual ways to treat your staff – and the tax implications of each choice:
1) Staff Bonuses
If a staff bonus is given in staff wages – these are taxable via the PAYE system.
They can be an excellent way of showing staff how much you value them – and need not be massive.
If given in November the bonus will be useful to the staff member for buying xmas presents and all the general costs associated with xmas. They will most likely be thankful for your thoughtfulness.
2) Staff Prezzies
‘Trivial Benefits’ can be given to staff up to the value of £50 per gift and are tax exempt. Make sure if you are buying gifts for your staff that you make it clear on the receipts etc that you hand to your accountant. Because you would also like these payments to reduce your tax bill – and not be attributed to you personally.
Owner managers are further subject to an annual cap of £300 on gifts to themselves or employees who are members of their family.
3) Staff Parties
Staff annual functions – i.e. a Christmas party, are tax free where the total cost per person attending is not more than £150 per year (including VAT).
As with staff presents – it is useful to your accountant to make it clear that the payment you have made is being treated as a staff party.
4) Holiday Incentive
One or two additional holiday days paid for by the employer can be an effective way of showing your staff recognition and contributing to family life etc.
5) Personal Thanks
You might be thinking that perhaps this year you can’t afford to give your staff a bonus etc. There is a possibility of setting a precedent with offering gifts and bonuses etc. Do not underestimate the power of a personal word to each employee. If business is tight employees should be open to hear this and you can tell them verbally how much they mean to you – but in this instance you will not be giving a bonus etc. But you will be giving them something perhaps more valuable.
Quay Accounts would like to wish your business happiness, productivity and prosperity at this time of year. May your business thrive and the benefits filter down to your employees.
Quay Accounts is on hand for you and your business – we are firmly in your corner – with a wealth of experience and in many cases we have been there and done that and got the xmas jumper to prove it. So please do not hesitate to contact us.
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