Tax-efficient Christmas ideas for your team

Christmas is all about ‘the gift of giving’, but this year, those acts of kindness mean more to your team now than perhaps ever before.

The cost of living crisis has seen prices skyrocket, so we wanted to share some tax-efficient ways you can celebrate Christmas with your team, and bring a smile to their faces in these testing times.

Under current guidance, you’re allowed to celebrate with your team without having to report it or have the usual benefit in kind tax implications. It’s referred to as a Trivial Benefit. You can give or do something for each of your team members that costs £50 (including VAT) or under per person. This is also applicable all year round, you don’t need to wait until Christmas. You could also host an in-person or virtual event or party and spend up to £150 per team member.

Here are some ideas:

Hamper on you

Nothing says Christmas indulgence quite like a luxury food or drink hamper! You could send one out to each team member, and personalise it to include all their favourite drinks and snacks! As long as the hamper comes in at £50 or under including postage and packaging, this is absolutely fine.

A nice idea is to support some local businesses that are offering hampers or put one together yourself.

Host a virtual party!

If you want to throw an in-person or virtual party, you can claim up to £150 per person each year. If you haven't claimed anything else this year, you can use the full £150 for each team member.

Some ideas:

• Wine or beer tasting
• Virtual cook-along
• Dinner (could be delivered)
• Cocktail making
• Games night

Voucher for everyone

If employees are worried about rising prices and how they will afford Christmas, a voucher as part of trivial benefits could help them with their Christmas costs. If you'd like to give each member of your team a voucher, this is allowed as long as each voucher is £50 or under (including any postage and packaging if applicable) and it can't be exchanged for cash.

You can do this as many times as you like throughout the tax year.

Some ideas:

• Supporting a local business offering vouchers
• Something to contribute towards their family celebrations
  
  

Throw a Christmas party

Get your team together in person for a fantastic night of celebration, you can claim up to £150 per person each year (if you haven't claimed anything else this year already)

Some ideas:

• Murder mystery event
• Comedy night
• Escape room
• Round the world party
• Movie night
• Black tie event 
• Employee awards ceremony
  
  

Things to consider

• Directors are eligible to receive the same £50 trivial benefits as long as the total throughout a tax year does not exceed £300 (this £300 limit does not apply to employees)
• If it costs more than £50 per item, the whole amount becomes taxable
• Has to be a 'just because' - can't be a reward or contractual
• The £150 per team member at events is for each person who actually attends the event or party

Like to know more? Chat to Natalie, our tax specialist on 0345 201 1580 or tax@thewowcompany.com