A recent discussion with a client has raised concerns over the advice given by HMRC during HMRC compliance visits, an issue that is very pertinent at this time of year.
The advice provided, although I must point out that this was only be one officer, was that store vouchers are not covered by the £50 trivial benefit exemption.
This was made as part and parcel of a review, but the review and advice was given in writing.
The officers argue was that all vouchers are taxable through either payroll, through a PAYE Settlement Agreement, or declared as a benefit in form P11D.
So what is the definitive advice?
Non-cash vouchers, such as store vouchers, are covered by the trivial benefit exemption of £50
Only cash vouchers, such as postal orders, are taxable
A cash voucher is a voucher that is exchangeable for cash
Store vouchers do not meet this criteria. They are only exchangeable for goods. As many employers give store vouchers to employees at Christmas, it is important that employers are aware of the difference and the tax consequences.
For further information please contact Paul Chappell on 03331 123456