MEMBERSHIP INSIGHT
On your behalf
Policy team update
The CIPP policy teamprovides details of recent poll findings and developments
I n the weeks running up to Christmas the policy team ran a series of quick polls that have built a picture of how employers utilise the opportunity that the festive season presents to be generous – or not – and to consider the impact that the tax system has on that generosity. Payroll’s influence In the first of our series of festive quick polls we asked the payroll community if the tax and National Insurance contributions (NICs) costs are considered when deciding what is included in their Christmas reward schemes. Just over a fifth of poll respondents said they do factor in these costs. Of the 148 responses received, over half (58%) do not provide any kind of seasonal reward scheme, but: ● 22% said that yes, the tax and NICs costs are a consideration ● 15% said that the costs were not a consideration in decision making at all, and ● 5% recognised that the costs should have been factored in to decisions, but actually they had not. Payroll professionals are in a unique position to really help their business. With payroll being one of the biggest parts of any business, it has a major influence over company costs. The knowledge held by payroll professionals is key to efficiency savings within an organisation; the tax and NICs costs of reward packages being a prime example. Thanking workers Our second quick poll revealed that three quarters of respondents who
provide a Christmas reward to their staff, do so to say thank you. The poll showed that 45% do not provide any kind of Christmas reward (“bah, humbug”, some might say) but of the 55% who do provide 75% do so to say thank you to their staff. Of those responding, 12% provide a festive reward for no other reason than it is just expected; however, 10% hope their reward will help to engage their workforce and 4% hope to inspire them. The results certainly indicate that most employers use their Christmas reward to convey a positive message. Christmas party cost Barely a year goes by when we don’t receive a salutary message from a legal specialist warning about the risk to the employer caused by ‘excess’ at the Christmas party. Yet, nevertheless, these warnings are not enough to prevent nearly half of employers providing and covering the full cost. Our third quick poll also revealed that nearly a fifth of employers contributed in part; however, a third pay nothing at all towards a party. Cost is always going to be the major factor that an employer must consider. It could be that staff have had a pay rise which they value over a festive work celebration, or there could be an alternative seasonal gift that is offered. Great expectations? In our fourth quick poll, we asked what you would be expecting from your employer at Christmas. Of responses received, 46% said that they would be expecting nothing. Like all our polls
we don’t know the reasons behind this statistic, so as with the Christmas party scenario above, it is not necessarily a negative result. Our quick polls just provide options, so it may well be that employees are provided with, say, an afternoon off to do Christmas shopping or an early closure on Christmas day eve. Some businesses may even close down between Christmas and the new year, providing employees with a decent break, despite the possible loss of revenue. Only an in-depth survey would drill down into these kind of details – watch out for one in 2019. It is encouraging to see that traditional gifts – such as drink and food, possibly in the form of a hamper or turkey – are still provided (10% in total). Cash and non-cash vouchers pulled in an equal response with 4% each receiving these gifts, but the top gift is still the Christmas party or other festive experience (65%) as opposed to a tangible reward. Processing gifts In our penultimate festive poll, we asked how your employer processes the value of your seasonal gift. Tax-savvy employers lead the way with 48% of relevant respondents ensuring that this generosity falls within the trivial benefit rules. Prior to April 2016, there was no statutory limit below which benefits would not be taxable and so this subject has been the cause of debates between the employer and their adviser and HM Revenue & Customs (HMRC) for many years. The news that HMRC had accepted the recommendation from the Office of Tax simplification, in a bid to increase administrative simplicity, was indeed welcome. For a gift, or token, to be considered a trivial benefit it must:
...employers use their Christmas reward to convey a positive message
| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 8
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