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What are the regulations for gift cards as a company?

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Gift cards up to £50 per occasion are tax-free under HMRC's trivial benefit exemption

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What are the regulations for gift cards as a company?

Giving gift cards to employees is a popular way to show your appreciation as a manager or employer, but it's important to understand the regulations around employee rewards before you begin gifting. HMRC has specific guidelines around awarding employee gifts and benefits in the UK and some of these rules apply to gift cards.

Understanding these regulations can help you avoid unexpected tax implications for your business and your staff. By taking the right approach to employee rewards you can give business gift cards in a way that is entirely compliant and beneficial to your company.

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Can a company give gift cards to employees?

Yes. Companies in the UK can give gift cards to their employees. Gift cards are widely used as an employee reward by businesses of all sizes, from small independents to large organisations. However, gift cards are treated by HMRC as a benefit in kind.

This means gift cards may be subject to tax and National Insurance contributions depending on their value and how they are given. It is therefore key to understand when a gift card qualifies as a trivial benefit and when it becomes a taxable perk.

What are the rules of giving gift cards to employees?

There are several important rules to keep in mind when giving gift cards to employees in a company.

The trivial benefit exemption applies. HMRC allows employers to give employees gifts up to the value of £50 without triggering a tax liability, provided the gift is not cash or a cash voucher, is not given as a reward for work or performance, and is not part of a salary sacrifice arrangement.
Gift cards are not the same as cash vouchers. A gift card tied to a specific retailer is treated differently to a cash voucher. Retail gift cards can qualify for the trivial benefit exemption, whereas cash or cash-equivalent vouchers do not.
The £50 limit applies per occasion. Each individual gift must not exceed £50 in value. If the value goes over this threshold, the full amount becomes taxable, not just the portion above £50.
Directors of close companies have an annual cap. For directors of close companies, the total value of trivial benefits is capped at £300 per tax year. Exceeding this means the excess becomes a taxable benefit.
Records should be kept. Even when gifts fall within the trivial benefit exemption, it is good practice to keep clear records of what was given, to whom, and when.

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The HMRC rules explained

The HMRC trivial benefit rules are designed to allow employers to reward staff in a simple, tax-efficient way without the administrative burden of reporting every small gesture.

For a gift card to qualify as a trivial benefit, it must cost £50 or less; must not be cash or a cash-equivalent voucher; must not be provided as a reward for a specific service or performance; and must not be contractually obligated as part of an employment agreement.

When these conditions are met, neither the employer nor the employee needs to report the benefit to HMRC or pay any tax on it. This makes retail gift cards one of the most practical tools for employee recognition. If the value exceeds £50 or the gift is performance-related, it must be reported on a P11D form and the appropriate tax and National Insurance contributions must be paid.

For businesses planning larger gifting programmes, it is worth consulting a tax adviser to ensure full compliance. If you need some inspiration to decide on which gift cards to choose, take a look at our short guide on the best gift cards for employees.