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Section 324 ITEPA 2003

»Ê¹ÚÌåÓýapp guidance at EIM01450 onwards applies generally to gifts and other voluntary payments from third parties to directors and employees, except for 2015/16 and earlier those in an excluded employment (see EIM20007).

Small gifts of goods made to employees (or a member of their family or household) are exempt from tax if the following conditions are met:

• the gift is not provided by the employer, or a person connected with the employer
• neither the employer, nor a person connected with the employer, directly or indirectly procured the gift
• the gift is not made in recognition, or in anticipation, of particular services performed by the employee
• the gift is not in cash or in vouchers or securities that can be converted into cash
• the total cost to the donor of all eligible gifts to the employee in a tax year does not exceed £250 (before 6 April 2003 the figure was £150). »Ê¹ÚÌåÓýapp cost to the person making the gift includes any VAT paid, whether or not it is reclaimable.

Where the cost of a gift (or gifts) an employee receives from the same third party in a tax year exceeds £250, tax will be payable on the full amount of the gifts.