Provide a nursery or crèche for employees’ children. A workplace nursery can be a very valuable benefit for working parents, and it’s tax free for the employee if qualifying conditions are met. The employer must be responsible for the management and financing of the nursery, and the care must be provided on the employer’s premises or in an area hired for that purpose (which must not be a private home). You will also need to meet local child nursery registration requirements. Increase employee morale with trivial benefits. Employees and directors can be provided with gifts worth up to £50 per item which are totally free of tax and NICs. The gift must not be cash or a cash voucher, it must not be provided as a reward for services, and the individual must not be entitled to receive the item under any contractual obligation. Directors of close companies and their family members cannot receive more than £300 of such trivial benefits in any one tax year. EXAMPLE Brian is the director of his own company, BVC Ltd. He has an interest in botany. BVC Ltd occasionally provides Brian with books and equipment relating to his hobby. As long as each item does not cost more than £50, and the total value of the gifts BVC Ltd makes to Brian in any tax year do not exceed £300, there is no taxable benefit for Brian.
CHECKLIST
Review tax-efficient schemes for rewarding employees Consider the tax advantages of providing all-electric company cars, electric charging points and cycle to work schemes Remind employees to take advantage of eye and health checks Boost morale with tax-free gifts
This publication is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The Financial Conduct Authority (FCA) does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. This publication represents our understanding of the Finance Act 2026, the law and HM Revenue & Customs practice as at 18 May 2026. All rights reserved.
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