This guide explains your tax and National Insurance contributions (NICs) obligations if you provide or pay for an employee’s holiday.
On this page:
You provide an employee with holiday vouchers.
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:
The value to use is the cost to you of providing the vouchers.
You provide an employee with a holiday: you arrange it and pay the supplier for it. The contract is between you and the supplier.
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:
The value to use is the cost to you of providing the holiday.
Your employee arranges a holiday but you pay the supplier directly for it. The contract is between the employee and the supplier.
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:
The value to use is the amount you pay to the supplier.
Your employee arranges and pays for a holiday, but you reimburse their costs. The contract is between the employee and the supplier.
These reimbursements count as earnings, so:
The value to use is the amount you reimburse to the employee.
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.
