Yes, as an employer you can give tax free gifts to your employees provided that they satisfy the following four points:

  1. It cost you £50 or less to provide

It is important to note that should the benefit exceed £50, for example the gift was £50 and the postage was £2.99, then the whole benefit of £52.99 would become taxable and not the value in excess to £50.

  1. It is not cash or a cash voucher

Tangible gifts such as flowers, chocolates and wine are common gifts which comply with legislation.

  1. It is not a reward for their work or performance

For example, you cannot run an incentives campaign and reward your staff through this exemption.

  1. It is not in the terms of their contract

This cannot be part of their contractual compensation.

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Written by Katy North

Katy North, Tax Department, Carlisle Office