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Spread a little Christmas Cheer (and why not extend it to the rest of the year too)

Spread a little Christmas Cheer (and why not extend it to the rest of the year too)

christmas_woman-carrying-presents-xsI know what you’re thinking. ‘It’s only October – can we pleeeeease not talk about Christmas already’.

But a successful and happy family Christmas doesn’t just happen. It takes work and planning. Like running a business. You can’t just open the doors and hope that you get customers – it takes work and planning. And no business can be truly successful unless you have a happy and motivated workforce.

Christmas is the perfect time to say thank you to your employees for the work that they have put in for you over the previous 12 months.

So, this festive season, why not take the opportunity to show your employees how much they are appreciated? The obvious choice is to pay a Christmas bonus, but you will have to pay Employer’s NI on the bonus and the employees themselves will have to pay Tax and NI on it, potentially reducing a £100 bonus to £68 for a basic rate taxpayer. And, as the bonus is paid as part of wages, it has a tendency to be swallowed up by everyday household expenses.  Hmmm. Happy Christmas?

santa_gift-list-xsSo, how about gift vouchers? These are rising in popularity with both employees and employers, and because they are exchanged in shops for goods, the employee actually does receive a gift. However, there is a catch. The value of the vouchers must be reported on form P11D, and the value of the vouchers added to earnings and NI (but not tax) deducted through the payroll. So again, maybe not quite as good as it first appears.

What about a Christmas party? You can throw a party with no NI liability provided the following conditions are met: The event is annual, open to all employees and costs no more than £150 per head. And why confine it to Christmas? Say your Christmas party costs £80 per head, you could hold an annual Easter dinner for £50 per head and an annual Summer barbecue, open to all employees, for £20 per head and  it will still be NI free as the £150 limit is an overall annual amount.santa-claus-savings-xs

But thanking your staff at Christmas doesn’t HAVE to cost you your hard-earned cash. The Argos for Business research survey has revealed that nearly half of employees feel a strong sense of accomplishment when praised by their employer, and are motivated to work harder, particularly amongst the younger generation. Two fifths of them claim that positive feedback is more motivating than financial rewards, and one in ten workers are more likely to stay with their current employer if they are thanked regularly. (Data obtained from Pay and Benefits Magazine) And it doesn’t cost a penny! There’s a result all round.

A touch of flexibility around the season of goodwill doesn’t go amiss either.  How about offering your employees one ‘late start’ day in December where they can come into work at 11.00am instead of 9.00am. Useful if your employees have a Christmas party to go to (but not all on the same night, obviously). Or you could give everyone an extra day off in December to go Christmas shopping (or just to spend the day at home and unwind a bit).

This could be extended to other times of the year too. Your employees can be given the ‘gift’ of a ‘duvet day’ in the month of their birthday, or for a particularly good piece of work or for volunteering to do some overtime to help out in a really busy period.

And how about a special thank you to those rare employees who have stayed with you through thick and thin for a number of years by presenting them with a Long Service Award?  There is no requirement to report on P11D or pay Class 1a NI provided the following conditions are all met:

The employee has worked for you for at least 20 years.

The gift is not cash and has a value of less than £50 per year of service.

The employee has not been given a long service award within the last 10 years.

So, an employee who has worked for you for 25 years can be given a gift up to the value of £1250.

santa-clausess-smiling-thankyou-xsLetting your employees know that their efforts are appreciated goes a long way in motivating your staff and engendering a sense of loyalty to your business and it doesn’t have to cost the earth. Sometimes just a simple heartfelt ‘Thank you’ is enough.



Amanda Chidwick

Amanda Chidwick – MAAT MMPA

Written by Amanda Chidwick – MAAT MMPA of Spurling Cannon

If you would like to contact Amanda about this blog post or any other accounts related matter, please e-mail her on amanda.chidwick@spurlingcannon.co.uk or phone the office on 01843 848383

Spurling Cannon Limited have made every effort to ensure accuracy at the time of publication. Information may be subject to legislative changes. Recipients should note that information may not reflect individual circumstances and should, therefore, not act on any information without seeking professional advice. We cannot accept any liability for actions taken or not taken as a result of the information given in this publication.


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