insideKENT Magazine Issue 57 - December 2016 | Page 189

BUSINESS ALL I WANT FOR CHRISTMAS… IS A THANK YOU by Paul Nixon of Wilkins Kennedy IT’S THAT TIME OF YEAR AGAIN AND AS THE CHRISTMAS HOLIDAYS START TO APPROACH, MANY EMPLOYERS WILL BE THINKING ABOUT WAYS THEY CAN GIVE THANKS TO STAFF FOR THEIR HARD WORK OVER THE PAST YEAR. IF YOU DO DECIDE TO OFFER A LITTLE SOMETHING EXTRA, THEN THERE COULD BE SOME TAX ADVANTAGES TOO. Of course, the Christmas period is not all about winding down and planning staff parties. Plenty of businesses experience an influx of activity to accommodate a busier season, either because that is the time of year when their products and services are in high demand, or holidays planned at the end of the December make it a shorter month – so there is plenty more to do over the available working days. Whatever the reason, your staff are pivotal to the success of your business, both at Christmas and the whole year through – so it is of little surprise that employers want to thank them by the time December comes around. This doesn’t have to be a financial gain, but employers and employees alike will be wondering what it could be that would represent a little extra something to say thank you and whether or not their hard work will go unnoticed by their employers. Christmas rewards are a great morale booster but when January rolls around and your staff come back in to work with a severe case of the holiday blues, it’s at that point it becomes important. Returning on 3rd January knowing that you are appreciated and that your boss is happy with what you are doing, will go a long way to showing that they are valued. In turn, it could help ensure that your staff continue to do the amazing job that they were doing before the holidays came around. Gift giving is probably the easiest way employers can reward their hard-working staff at Christmas. HMRC will allow you to give a gift up to the value of £50 to any one person during that tax year, on the condition that it is a business gift – a diary or stationery for example. If you decide to purchase non-VATable items, such as food, you do not have to account for VAT as long as that gift does not exceed £50. Think about what might have the greatest impact on your employees and think about spreading the reward out over December and January if that is possible – rewarding your loyal staff is something you should do over the whole year as a matter of good staff relations. You could also consider holding a party for staff. It would boost morale and bring everybody together but the great news is that the taxman will also let you enjoy the party tax free. Normal business entertainment of clients or other external contacts does not enjoy any tax advantage, but, when you are providing entertainment for your employees, things change. The taxman regards this type of expense as a ‘business purpose’ and the costs involved can all be treated accordingly. Many companies are now recognising the ongoing importance of staff reward schemes, and the positive impact they can have on a business. A well thought out and implemented scheme should not be the last word as it’s always the personal touch that matters more. A quick thank you or a well done goes a long way. But note that this applies strictly to your staff and your staff only. If external guests are invited or, more likely, if your staff can bring spouses or partners to the festivities, you get back into the world of business entertainment and you need to start dividing up the costs so that you only claim back on the proportion that has been spent on your staff. Whilst staff parties and gifts provide short-term appreciation, actions can speak louder than words. A recent survey conducted by Eden Red showed that only 37% of employees receive any kind of thank you from their manager, but just a simple thank you costs nothing and it can really go a long way. After all, a Christmas gesture might be appreciated at the time, but once January comes around it will be forgotten. 189 If you would like to know more about how you can say thank you to your staff this Christmas, and throughout the year, plus enjoy a few tax advantages, why not contact Wilkins Kennedy to see how we can help. Email Partner, Paul Nixon, at [email protected] or call on 01233 629255. www.wilkinskennedy.com