2.    Paying employees early before Christmas

Some employers need to pay their employees earlier than usual in December. This can be for several reasons, such as businesses closing during the festive period and needing to pay workers earlier than normal. As in earlier years HMRC have announced that they have relaxed the RTI (Real Time Information) reporting obligations.

If you do pay early over the Christmas period, you must report your normal or contractual payment date on your Full Payment Submission (FPS). For example: if you pay on 20 December but your normal payment date is 31 December, please report the payment date as 31 December. The FPS would need to be sent on or before 31 December.

Doing this will help to protect your employees’ eligibility for income-based benefits such as Universal Credit, as an early payment could affect current and future entitlements.

3.    Christmas gifts of up to £50 per employee are tax free

Employers should note that certain gifts to staff at Christmas are tax free if structured correctly. Employers are allowed to provide their directors and employees with certain “trivial” benefits in kind tax free. This exemption applies to small gifts to staff at Christmas where the cost to the employer is no more than £50, this is in addition to gifts on their birthday, or other occasions and includes gifts of food, wine, or store vouchers.

4.   Christmas party time!

There continues to be no taxable benefit for employees provided that all staff are invited, and the cost to the employer does not exceed £150 a head, inclusive of VAT.

If you have already had an summer event, provided the combined cost of the two events is no more than £150 a head, there would be no taxable benefit in kind. If, however, the summer event cost £80 a head and the Christmas party £100 a head, only one event would qualify for the exemption and the employees would be taxed on the £80 benefit.

5. Employer banned for hiring six illegal workers: A reminder to check right-to-work status

A recent case involving a former company director in Hartlepool and Guisborough underlines the importance of checking employees’ right to work in the UK. Edris Ali, 39, who previously ran a pizza restaurant and a car wash, was banned as a director for ten years after hiring six illegal workers from Iran, Sudan, and Cote d’Ivoire. The workers were discovered during Immigration Enforcement visits, leading to substantial fines and legal action against Ali.

Ali employed two individuals without work authorisation at Tasty Pizza restaurant in Hartlepool and a further four at Bubbles Car Valeting in Guisborough. His actions resulted in penalties of £20,000 and £60,000, respectively, for the businesses, alongside the ten-year ban from company directorship.

Takeaway point

The High Court ruling against Ali serves as an important reminder for employers to check each employee’s right to work in the UK before they begin employment.

Under UK law, employers must carry out simple right-to-work checks before employing someone. Failure to comply with these requirements can result in severe penalties.

The Home Office provides guidance on how and when to conduct a right to work check. The guidance is periodically updated with the last update being published in September 2024.

Following the guidance provides your business with protection. If it was later found that someone employed by you did not in fact have a right to do the work in question, you would not be charged a penalty if you had correctly conducted right to work checks.