Cash gift for colleague

somo999

Hello, 

Wondering if you can help. Our team of 50+ NHS doctors all contribute cash to make a sizeable gift for our 5 admin team members for Christmas each year. We usually give them cash... Several hundred quid each.

It has been queried that this would be a taxable benefit >50 pounds and so we should do vouchers, but my feeling is its not taxable as we are not their employers... They are our colleagues. We don't get to chose who is employed, and do not have managerial responsibility for them.

Any thoughts please? Thanks in advance, and apologies if this is the wrong place to post 

General_Grant

somo999 said:

Hello, 

Wondering if you can help. Our team of 50+ NHS doctors all contribute cash to make a sizeable gift for our 5 admin team members for Christmas each year. We usually give them cash... Several hundred quid each.

It has been queried that this would be a taxable benefit >50 pounds and so we should do vouchers, but my feeling is its not taxable as we are not their employers... They are our colleagues. We don't get to chose who is employed, and do not have managerial responsibility for them.

Any thoughts please? Thanks in advance, and apologies if this is the wrong place to post 

Of course you are correct.  It is not part of your or their employment contracts.

somo999

Thanks. I think it's because of this 

https://www.att.org.uk/employers/welcome-employer-focus/tax-free-gifts-employees

Which states that any Christmas gift to an employee should be under £50 if cash to avoid tax. We don't want to give vouchers

Marcon

Unless you are each giving in excess of £50, then just think of it as lots of individual gifts which happen to be in the same festive envelope at the time they are handed over!

f5morg

I thought this is more under the £3000 tax free gift allowance, or is that wrong? If no one declares it either side, receivers or givers, then I don't know how anyone knows about it, I have no real knowledge of the gift allowance or any paperwork

Jaybee_16

somo999 said:

Thanks. I think it's because of this 

https://www.att.org.uk/employers/welcome-employer-focus/tax-free-gifts-employees

Which states that any Christmas gift to an employee should be under £50 if cash to avoid tax. We don't want to give vouchers

That link refers to an employer/employee relationship. Do the doctors employ the admin staff or are they colleagues employed by the NHS?

Sandtree

So many confused responses on here!!

One person can give another person however much they would like and it'll never be subject to income tax.

An employer is limited what they can give their employees as a "gift" before its considered income... were this not the case then all annual bonuses would be put through as a gift and so tax free.

Unless the doctors directly employ their admin people then no income tax consideration.

f5morg said:

I thought this is more under the £3000 tax free gift allowance, or is that wrong? If no one declares it either side, receivers or givers, then I don't know how anyone knows about it, I have no real knowledge of the gift allowance or any paperwork

The gift allowance is in relation to your estate on your death. If I were to gift you £10,000 today and die tomorrow then that money would be considered as part of my estate for the calculation of inheritance tax. A person can give up to a total of £3,000 per year and it not be considered for inhreitance tax. Over that and it forms part of the estate. 

IHT considers gifts over 7 years but by a decreasing amount. So the only issue occurs if the doctors are being very generous elsewhere as well and then one dies within 7 years but the issue is for the estate.

Reginald74

If they give it from their own pockets it's already been taxed and is just a gift. Tax is only an issue if it comes from company funds.

Undervalued

Assuming the doctors and admin staff are employed only by the NHS then it is entirely a personal matter and tax free.

If however some of the doctors also have a private practice (and most consultants do) AND if the the admin staff earn some money working directly for the doctors private practice, then it is far more complicated.