On the fifth day of Christmas, the taxman gave to me……a five kilo turkey (tax free)!
On the fifth day of Christmas, the taxman gave to me……a five kilo turkey (tax free).
It used to be such a great Lancashire (and elsewhere) tradition that employers gave their staff turkeys at Christmas. Of course back in the day, the tax man was a true gentleman and wasn’t usually minded to charge tax and NIC on such gifts.
As time passed, Inspectors of Taxes became much more strict about anything provided to employees by employers, and even bunches of flowers given on marriages or births were all taken into account for tax purposes.
Slowly but surely the powers that be recognised the commercial importance of using Revenue staff to track down the larger amounts of tax due rather than having them check the tax due on bottles of wine gifted to staff and Her Majesties Revenue and Customs (HMRC) introduced an unofficial exemption for those small gifts which could be considered “trivial”.
So even where employers added a bottle of Bucks Fizz to go with the turkey, they had achieved such fabulous discounts for both that the total cost to them for this Christmas gift was below the HMRC triviality threshold.
With a brief letter to HMRC triviality was confirmed and so neither tax nor NIC would be due.
The employer is able to claim the VAT back on the Fizz, corporation tax relief is available on the total costs of the gifts and employees are very happy to have received such an unexpected seasonally related gift.
Rock on Tiny Tim