Tax and NIC considerations on seasonal reward schemes

03 December 2019

In the run up to Christmas in 2018, the CIPP ran a series of festive-themed Quickpolls on our web pages to gather a brief insight into how Christmas impacts payroll professionals.

As we approach the 2019 festive period we thought it would be worthwhile revisiting the results of some of those surveys to provide you with the results and provide what we hope will be a little light relief from the turmoil of electioneering.

Are the tax and NIC costs of your Seasonal reward scheme a factor in your decision making?

Yes – 22%

No – 15%                          

No, but we recognise it should be – 5%

Not applicable – we don’t provide – 58%

Does your employer cover the full cost of the staff Christmas party?

Yes, in full - 49%

No, cover part - 18%

No, pay nothing - 33%

How will your employer process the value of your seasonal gift?

 PSA - 18%

Will fall within Trivial Benefit rules – 29%

P11D reporting – 5%

Payrolling – 8%

Not applicable – 40%

The quick polls that are run throughout the year aim to gather an indicator of views at the time – a straw poll if you will and the Christmas polls can be a little more ‘tongue in cheek’. This recognises the festive air that can permeate throughout December, but nevertheless, the 2018 results were interesting and provide us with an opportunity to compare how we may sit alongside our peers.

Additionally, payroll departments, with their in-depth knowledge of tax and NIC implications are, quite often, best placed to advise companies on the cost of providing certain rewards, including those that could potentially be offered over the festive period.

Any businesses that are not considering the tax implications and additional NIC costs of the reward packages that they offer should turn their attention towards this when reviewing the perks that they offer to their staff at Christmas.

The CIPP will be running further seasonal QuickPolls throughout the month of December, so please look out for them on our News Online page and take a moment to respond when you can!


Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.