December is upon us, and employers are hastening to select the perfect reward for employees to acknowledge their exceptional efforts in what has been a considerably difficult period. With that in mind, consider availing of the Small Benefits Scheme, a governmental scheme that allows you to rewards employees without being subject to any Benefit-in-Kind tax liability for either employee or for the employer.
The Scheme, initiated in 2004 by the Irish government, allows Irish employers to reward their staff tax-free up to €500 before the end of December, of which 55% of Irish businesses currently avail of. With a new exemption to the scheme’s conditions, this is an opportunity employers cannot miss out on. Read below for a summary of local gift suggestions, the scheme’s conditions and exemptions which grant employers more flexibility to benefit from the scheme.
Support local
The most popular rewards given through the Small Benefits Scheme are gift cards and vouchers, to give employees the gift of choice in spending their rewards.
Guaranteed Irish encourage Irish employers to continue supporting local through their corporate gifting. Guaranteed Irish members AllGo and Me2You provide the perfect reward, consistent with the Small Benefits Scheme to reward employees tax-free and incentivise them to purchase from local, Irish businesses.
AllGo
The AllGo Mastercard Gift Card is the Guaranteed Irish gift card that can be spent anywhere that accepts Mastercard - in any shop, supermarket or business, online, or even abroad. That's 32 million places you can spend it in! And it's tax-free up to €500!
For more information and to order online, visit www.allgo.ie.
Me2You
Support Irish retail this Christmas with a Me2You Gift Card. Did you know you can reward employees up to €500 tax-free with a Me2You Gift card? Over 5000 stores nationwide and 1000 exclusive to Me2You including Penneys, Smyths Toys, Applegreen, Tesco, Brown Thomas, Currys, Boots, M&S, Harvey Norman, TK Maxx and many more. By giving a Me2You Gift Card we’re all playing a part in supporting Irish jobs and spending in our shops.
For more information and to order online, visit www.me2you.ie
Scheme conditions
Employers must consider four principal criteria when utilising the Small Benefits Scheme.
1. The first condition stipulates that the reward per employee must not exceed 500€, though a lower sum can be rewarded, in addition to differing amounts for different employees.
2. The second condition requires that the reward must be a once-off in the given Irish tax year, running from January to December to avail of the tax-free benefit. However, given the perseverance and diligence of essential workers across multiple industries this year, the government has made an exception to this condition. A waiver to the one-voucher condition now allows employers to buy multiple rewards per employee whilst retaining the maximum combination of rewards per employee at €500.
3. The third condition of the Small Benefit Scheme stipulates that employer rewards cannot be a cash equivalent or easily converted into cash. Employers cannot give benefits through payroll or any means that will allow employees to withdraw cash.
4. The fourth and final condition specifies that employers must not sacrifice any employee’s salaries. The company must be invoiced for the total amount and must pay for rewards from company funds.
Waiver
The once-off voucher waiver only applies to employees who continue to work during the Covid-19 period and who perform key roles in providing essential and public services across an extensive range of industries from retail and manufacturing to information and communications. Visit www.gov.ie for a full list of essential services.
No payroll adjustments or a Revenue return are required to avail of this scheme. Employers are invoiced by the reward provider for the total value of tax- free rewards, which is treated as a normal business overhead for accounting purposes.
Visit GuaranteedIrishGifts.ie for hundreds of local gift ideas this Christmas!