Last updated: 18 October 2026
Can a company get tax relief for paying for an employee’s wedding gift?
Yes, the company can usually deduct the cost as a staff expense. But for the employee, a gift from their employer, such as paying for a honeymoon night or a taxi to the airport, is normally a taxable benefit in kind, even though the reason is personal. That’s because it’s provided through the employment. The exception is a trivial benefit: a non-cash gift costing £50 or less, not a reward for work, and not in the contract, is tax-free.
Tax treatment of gifts to employees
| Gift | Employee tax | Company deduction |
| Non-cash gift costing £50 or less, not a reward | Exempt (trivial benefit) | Yes |
| Gift over £50, such as a hotel night | Benefit in kind on full cost | Yes |
| Cash or a cash voucher, any amount | Taxable through payroll, with NIC | Yes |
| Wedding gift from a business contact (not employer) | Usually exempt up to £250 | Restricted |
| Long-service award (20+ years) | Exempt up to £50 per year of service | Yes |
Trivial benefits
- Cost of £50 or less per gift, including VAT
- Not cash or a cash voucher
- Not a reward for work or performance
- Not provided under the employment contract
- Directors of close companies are limited to £300 a year
Reporting a taxable gift
If the gift isn’t exempt, the company can:
- report it on form P11D, with Class 1A NIC at 15%
- payroll the benefit, if registered to do so
- include it in a PAYE Settlement Agreement (PSA), paying the employee’s tax so the gift is tax-free for them
Example
Fern Ltd pays £240 for a hotel night and £60 for a taxi to the airport for an employee’s honeymoon. As the £300 total is over £50, it isn’t a trivial benefit. The company includes it in a PSA, paying the tax and NIC grossed up, so the employee has nothing to pay. The cost, including the PSA tax, is deductible for corporation tax.
Splitting gifts
Splitting a gift into several items under £50 to avoid tax won’t work if they’re really one gift. HMRC looks at the substance.
Staff events
The annual events exemption covers parties and similar events open to all staff, up to £150 a head a year. A wedding gift to one person doesn’t qualify.
VAT
VAT on business gifts costing £50 or less in a 12-month period to the same person can usually be reclaimed. Gifts above that may need output VAT accounting.
Mandatory payrolling of benefits
Mandatory payrolling is being phased in. Company cars, car fuel, vans, van fuel and medical benefits must be payrolled from April 2027, and most other benefits, including taxable gifts, from April 2028, according to HMRC’s August 2026 Employer Bulletin. From then, taxable gifts will be taxed through payslips in real time rather than reported on P11Ds. Employers can register to payroll other benefits voluntarily from November 2026, and should check their payroll software is ready.
Common mistakes
- Assuming a personal reason, such as a wedding, makes a gift tax-free
- Giving cash or a cash card as a wedding present without putting it through payroll
Frequently asked questions
Can I give an employee a £100 wedding voucher tax-free?
No, vouchers that can be exchanged for cash are taxable; other vouchers over £50 are a benefit.
Does the company need to report trivial benefits?
No.
Is flowers or a card fine?
Yes, under £50.
Can a director give themselves a wedding gift?
Only within the trivial benefits limits.
Related: declaring a cash gift from your employer, employee reward schemes and tax on retirement gifts.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with employee benefits and payroll. See our payroll accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 18 October 2026. It is not personal advice, so speak to an accountant about your own situation.
