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Replies to Queries - Incentivisor

31 March 2005
Issue: 4001 / Categories:

Incentivisor

A client of mine wants to increase productivity and promote initiatives by rewarding his staff with gift vouchers. These would be given to staff who exceed their targets and would be worth, say, about £200 every three months. I understand that these are taxable and I suspect that they are also subject to Class 1 National Insurance contributions. Can readers confirm this and also let me know how the liability arises.

Incentivisor

A client of mine wants to increase productivity and promote initiatives by rewarding his staff with gift vouchers. These would be given to staff who exceed their targets and would be worth, say, about £200 every three months. I understand that these are taxable and I suspect that they are also subject to Class 1 National Insurance contributions. Can readers confirm this and also let me know how the liability arises.
Does the employer subject these to tax or does he enter the amounts on P11Ds and the employee is then assessed, perhaps via the next year's tax code? And is there any NI liability? Is this Class 1 or Class 1A and how is this collected?
I would be grateful for readers' advice on these matters. Is there a more tax and NIC-efficient way of rewarding staff?
(Query T16,582)  

Issue: 4001 / Categories:
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