This article outlines the tax, National Insurance and VAT implications of Christmas gifts and gift vouchers for employees and customers in the UK. It explains the trivial benefit threshold of £50, the £300 cap for directors, and the VAT treatment for gifts over £50. The guidance also covers reporting requirements such as P11D and the conditions for tax‑deductible promotional gifts.
A gift is a trivial benefit if it costs £50 or less per employee.
They are taxable benefits in kind, subject to Class 1A National Insurance, and must be reported on a P11D form.
Customer gifts over £50 must be treated as sales, and VAT must be accounted for on the full value.
Trivial benefits to directors or officeholders are capped at £300 per year, with a £50 cap per individual benefit.
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