An employer may provide employees with a seasonal gift, such as a turkey, an ordinary bottle of wine or a box of chocolates at Christmas. All of these gifts can be treated as trivial benefits. For an employer with a large number of employees the total cost of providing a gift to each employee may be considerable, but where the gift to each employee is a trivial benefit, this principle applies regardless of the total cost to the employer and the number of employees concerned. If a benefit is trivial it should not be included in a PSA (EIM21861).
If the gift extends beyond one of the items mentioned above, for example from a bottle or two to a case of wine, or from a turkey to a Christmas hamper, you will need to consider the contents and cost before being able to determine whether the benefit is trivial. Certain gifts from third parties (suppliers/customers) are tax free if all these conditions are satisfied:
- The gift consists of goods or a voucher or token only capable of being used to obtain goods, and;
- The person making the gift is not your employer or a person connected with your employer, and;
- The gift is not made either in recognition of the performance of particular services in the course of your employment or in anticipation of particular services which are to be performed, and;
- The gift has not been directly or indirectly procured by your employer or by a person connected with your employer, and;
- The gift cost the donor £250 or less, and;
- The total cost of all gifts made by the same donor to you, or to members of your family or household, during the tax year is £250 or less.
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