How to give workers a tax free gift in four simple steps

In SMEs margins are often tight, and so giving bonuses to the workforce can not only seem financially unachievable pipedream, but quite low on the list of priorities – but there is a lesser-known tax exemption on certain types of gifts for employees which not only makes this more affordable, but quick.

Better still, it’s so simple, it doesn’t involve paying National Insurance or reporting into HM Revenue and Customs (HMRC), so it won’t give you or your accountant a headache at the end of the financial year.

Last year, HMRC declared businesses wouldn’t have to pay tax on benefits for employees worth £50 or less – but just 22% of employers in the UK know this.

What’s more, just 10% of those in the know are actually taking advantage of this exemption – incredible considering that those who already give out some kind of gift to staff every year through their salary could save up to £48.10 per employee in national insurance and tax by swapping it out for an employee gift which meets HMRC’s requirements.

And the process couldn’t be easier.

In fact, ordering employee gifts which fit HMRC’s specifications, such as the One4all Gift Card, which can be spent in 55,000 stores nationwide, can be done online at the click of a button – and they don’t need to be declared to HMRC.

Here, Alan Smith, UK managing director at, which sells the UK’s leading multi-retailer gift card, the One4all Gift Card, explains how to give staff a tax free gift to your employees in 4 simple steps:

Decide an amount to attribute per employee

HRMC has kept this nice and simple. You don’t pay tax on benefits which have a value of £50 or less per employee.

Pick a gift to buy

Cash and cash vouchers are not tax-exempt. However, considering a survey of workers we recently carried out found that monetary-based rewards, such as cash and gift cards, can give workers the longest-lasting feel-good buzz, you might want to consider choosing an alternative which has a clear monetary value – such as a multi-store gift card.

Gift cards are a perfectly legitimate trivial benefit which fit HMRC’s criteria and, if you choose a multi-store gift card, employees will have almost as much choice of how and what to spend it on as if they’d received cash.

The One4all Gift Card is the UK’s leading multi-store gift card. It can be loaded with anything from £10-400 and can be spent in more than 55,000 stores nationwide, including Marks & Spencer, John Lewis, Argos, Boots, B&Q, Curry’s, H&M and WH Smith.

Order it

For One4all Gift Cards, this is as simple as selecting a value, quantity and entering your payment and delivery details. Gift cards are delivered within 3-5 days, with free standard delivery available on all orders and free signed for delivery on orders of over £500 in value, and pre-Christmas orders can be placed up to 21st December 2018 – so even if you leave until the last minute, staff won’t go without.

Give them out

Give them to your staff, but make sure they know the gift they are receiving is ‘just because’, as HMRC says this tax exemption is only applicable to gifts or benefits which aren’t given as “a reward for employees’ work or performance” – which is why Christmas is the perfect time to give them, as they can be positioned as a Christmas present – something every employee will understand and enjoy.

…And that’s it!

If an employee gift or benefit is bought in this way, there is no complicated paperwork. No need for receipts or filing. You don’t need to pay tax or National Insurance, or even go through a complicated process of declaring them to HMRC!

For more information and to buy £50 One4all Gift Cards for staff tax-free, click here.

Alan Smith is the UK managing director of works with over 6,000 businesses of various sizes to improve relationships between employers and the workforce using incentives and rewards, including the UK’s leading multi-retailer gift card, the One4all Gift Card, which can be spent in more than 55,000 stores nationwide.

Related Topics

Employee Benefits