With the heavy expense of Christmas coming up, there has been a welcome change that will benefit workers.
The amount employers can give to their staff as a non-cash gift has now doubled to €500.
We are not talking here about secret payments being made, like those exposed at the Central Bank and Permanent TSB.
It is just a small non-cash bonus. Despite this, there seems to be huge confusion among employers about the change that now allows staff to get a gift of up to €500 tax free from their employers this festive season.
The change to the rules around this non-cash award has been backdated to the day of the Finance Bill, published on October 22.
The upturn in the economy means large numbers of employers are preparing to give non-cash gifts to their employees this Christmas as a bonus. The benefit is usually in the form of a voucher or gift card.
Known as the small-gift exemption, the measure allows for non-cash rewards to be made without the employee being liable for income tax, pay related social insurance (PRSI), the universal social charge and benefit-in-kind tax.
However the benefit cannot go over €500 in value, and must not be in the form of cash. And the gift cannot be exchanged for cash, in part or in full.
However, many employers have yet to catch up with the change. This journalist is getting a large amount of correspondence from workers detailing how they are being taxed on amounts of less than €500.
It really behoves employers to work out the change that has been put in place. They could start with consulting the website of the Revenue Commissioners.
It is a small measure at a time when the lion’s share of tax relief and allowances that employees were entitled to have been whittled away, leaving little that can be refunded by the taxman.
The new change is expected to be a huge boost to retailers and to the gift voucher industry. Some €600m is spent on vouchers every year, according to industry experts.
The big winner is expected to be An Post, which is the majority owner of the One4All gift card brand. These vouchers can be exchanged in 7,500 retail outlets.
In the last few weeks, retailers have launched their own gift voucher scheme, known as FromMe2You.
Lots of workers are likely to get a gift voucher this Christmas.
But the gift will be of little benefit if it is taxed incorrectly.
So come on employers, get up on the change to the non-cash award scheme for employees.
Article Source: http://tinyurl.com/kbwqb42