Meeting certain conditions from HMRC when gifting an employee is known as a 'trivial benefit'. You won't need to pay tax or National Insurance or let HMRC know if all of the following apply:
The cost of the benefit must not be over £50
The benefit isn't cash or a voucher redeemable for cash
It isn't a reward for their work or performance
It isn't in the terms of their contract
You will have to pay tax on any benefits that don't meet all of this criteria.
If the cost of the benefit is over £50, the whole amount is taxable, not just the excess over £50. If it is a group event, you are allowed to calculate the average cost per employee.
If you're a director of a 'close' company you can't receive trivial benefits worth more than £300 in a tax year. A 'close' company is classed as a limited company run by 5 or fewer shareholders.
If you're thinking of gifting an employee, bare these rules in mind to ensure that you are also benefiting.
