With employers cancelling Christmas parties due to the spread of Omnicron and new restrictions being imposed, there are other ways that they can reward employees, said leading tax and advisory firm Blick Rothenberg.
Robert Salter, a client service director with Blick Rothenberg, said: ‘The good news is that there are several options for employers looking to support their employees with a ‘Christmas Thank You‘ if their Christmas party is cancelled.’
‘It is possible to run virtual Christmas parties, with the employer providing food and wine for the employee. The taxman has confirmed that such virtual events qualify as an annual party and would therefore be potentially tax-free for the employer or employee subject to the £150 per person annual limit which exists for traditional Christmas parties.’
He added: ‘Alternatively, delaying the Christmas party until the New Year–say February or March, when the Covid restrictions would hopefully have ceased, should still enable employers to treat the event as an annual party and treat the costs, again subject to the £150 per person limit, as potentially a tax-free reward for staff.’
‘Christmas hampers are an alternative to the Christmas party, or indeed, an addition to the party option. The good news is that providing the value of the HMRC’s no more than £50 per person could be a tax-free benefit under HMRC’s ‘trivial benefit rules. Hampers worth more than £50 per person would be a taxable benefit.’
‘Robert concluded: While the above options may not be a full replacement for the Christmas party, they would help employers show their staff that they continue to value their contribution and wish to support them at this time of year. If correctly cost ensure that there are no tax liabilities for either employees or employers.’