This guide tells you what the reporting, tax and National Insurance contributions (NICs) requirements are if you give an employee a Christmas bonus.
On this page:
You provide an employee with a cash sum as a Christmas bonus.
The cash bonus counts as earnings, so:
The value to use is the amount you pay to the employee.
You provide an employee with goods as a seasonal gift, and these goods can’t be resold or exchanged for cash by the employee.
For employees earning at a rate of less than £8,500 per year, you have:
For company directors or employees earning at a rate of £8,500 or more per year:
However, if HMRC accepts that your gift to one of these directors or employees is a trivial benefit, then you won’t have to report or pay anything on it. See the ‘More useful links’ section.
The value to use is the amount the goods cost you.
You provide an employee with goods as a Christmas bonus, and these goods can be sold or exchanged for cash by the employee.
For employees earning at a rate of less than £8,500 per year:
For company directors or employees earning at a rate of £8,500 or more per year:
For reporting on P9D, the value to use is the resale value of the gift.
For reporting on P11D, the value to use is the higher of:
It’s important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the whether the employee is a director of your company and on whether their earnings are above or below an annual rate of £8,500. For more information – including details of what’s included in the £8,500 threshold - follow the link below.
Trivial benefits – find out more
EIM01040: Christmas presents or bonuses
