Christmas tax tips
Tax free voucher
“Small benefits relief” allows an employer to give each employee a single non-cash voucher up to a maximum value of €500 (previously €250 up to 21 October 2015) in any tax year without having to apply PAYE/PRSI/USC.
However, if the employer gives two vouchers worth €100 each, the value of the first voucher may be disregarded but the value of the second voucher has to be included as notional pay for PAYE/PRSI/USC purposes.
Where a benefit exceeds €500 in value, the full value of the benefit will be subject to PAYE, PRSI and USC deductions.
Gifts to customers
Gifts provided to customers at Christmas should be of a promotional nature in order to ensure that tax relief may be claimed; some examples could include diaries, calendars, pens, branded memory sticks, etc.
It should be noted that the provision of alcoholic drinks, selection boxes, boxes of biscuits, etc. do not qualify as a tax deductible expense.
Christmas parties and other inclusive events
Where an employer incurs a cost in providing staff Christmas parties, special occasion meals or other inclusive events, such as sports days for staff, a taxable benefit will not be treated as arising where the expenses involved are reasonable.
The information contained in this update may be subject to change and accordingly is not a substitute for professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional advisor. This firm shall not be responsible for any loss whatsoever sustained by any person who relies on this update.