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How To Give A Gift Without Tax

As we enter the final few weeks of 2016, a well-placed reward or gift could be just what the team needs to help them cross the finish line with aplomb. But it’s that straightforward. Rewarding your staff without them being taxed is a very tricky thing to do. Hard cash and vouchers are pretty much out. But whilst HMRC aren’t particularly generous here, there are a few exceptions where the taxman can’t help himself to some of the value of the gift:

1. Celebratory Presents

Whilst employees will incur tax on all benefits on top of their salary and bonus, modest ‘celebratory gifts’ to mark a special occasion such as a birthday or new baby should be fine. Also included here would be a modest Christmas present.

2. Suggestion Scheme

Employers can pay staff £25 tax free for responses to an ‘organised’ suggestion scheme which formally asks employees for ideas on how to improve the way their business is run. But it get’s better. If a suggestion yields financial rewards for the business, the firm can pay the owner of the original idea 50% of that financial yield accrued in the first year (or 10% of the yield accrued in the first 5 years) up to a maximum of £5k, without tax.

3. Encouragement Awards

Merit based rewards to motivate high achieving staff are included in the concessions. A cash payment is allowed but only up to £25, but it’s better than nothing!

4. Recreational Reward

Businesses can lay on parties/functions for their workers up to the value of £150 per person without incurring any tax liability.  So it’s always worth ring-fencing the money for the annual Christmas do if you can….

5. Loans

Ok so you can’t give them money tax free, but you can lend them it. Companies can lend employees up to £10,000 without any tax implications. Ideal to help pay for season tickets for example.

But Sometimes The Best Rewards Are Free….

A ‘reward’ doesn’t have to be tangible and/or cause you to put your hand in your pocket: Praise your team wherever possible – it’s proven to be motivating. As well as making staff feel more appreciated, it improves their confidence and self esteem too. Remember to say ‘Thank You’ – the most important two words in the workplace. Better still, write handwritten thank you cards to staff, each with a personalised message expressing gratitude for their support on a particular project or issue over the past year. Such a simple gesture, but one that will go a long way to making them feel really valued.

For many hard-working employees, having time spent focused purely on them, discussing their performance, hopes and future in your business and ensuring their voice is heard would be the ultimate way to motivate and show they are valued. So as the traditional annual appraisal process enters the fray at this time of year, make sure you make the most out of this time by encouraging all managers to side-step the rankings (there is scant evidence these help to improve anyone’s performance) and simply focus on, what I like to call, “having-a-conversation” with your employees. Better still, ditch the ‘annual’ and lead by example, making sure these conversations are taking place on a much more regular basis….

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What To Do When You Know Someone Is Pulling A Sickie

Days off for legitimate sickness are likely to have increased a little in the past few weeks as you might expect – it’s pretty cold out and people are getting burnt out by now. On the other hand, staff are likely to have a lot of other ‘commitments’ outside of work to juggle at this time of year too. So not all pleas for a ‘sick day’ may be quite what they seem…

What do you do when you suspect one of your team might be pulling a fast one and you don’t know how to call them on it?

Keep A Cool Head – This Is What Policies Are For

You might be tempted to leap into a stern word on the phone or get on their case when they return. But tread carefully. If you suspect that an employee of yours is guilty of lying about their sickness, it falls under misconduct and therefore should be dealt with under your written disciplinary policy in a formal way. Hopefully this has been already communicated to your team members when they joined the business, but if not, you need to clearly outline it to them.

Gather Evidence

The first part of a disciplinary process will normally be to undertake an investigation to see what evidence you can find to corroborate your suspicions and therefore even whether a disciplinary is actually necessary. Having a ‘feeling’ therefore is not exactly firm evidence. Nor is someone just being active on social media (if you’re connected on any medium you may be able to see their activity) necessarily evidence of lying, as we all know that updates can be made within seconds. Updates which include selfies of them sipping mulled wine at a christmas market may prove more interesting (!), but still need to be investigated (take screenshots) and the employee given a chance to explain before any action is taken.

Hold A Return To Work Interview

Even if you have none of these, what I would recommend, is to speak to your team members on their return, and hold what we in HR call a ‘return to work interview’ and explain your concerns about their sickness, find out and what you can do to support them. You might not be able to prove that they were off for the reason they gave, however you may just shower them with so much care, that they will be the ones buying you the mulled wine tomorrow!

Want to chat about this or any other issue you may be facing?  Book here to get in touch today or call us on 0203 627 7048.

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p.s – To get ahead of your game when it comes to another area important to your employees: Reward and Recognition, download our FREE eBook: Show Me The Money! The Ultimate Guide To Reward And Recognition In An SME.

Gifts That Aren’t Just For Christmas: The Top Companies In the UK For Perks

Gifts That Aren’t Just For Christmas: The Top Companies In the UK For Perks

Is it really better to give than to receive? Well, given that more than a third of employees admit perks and benefits are amongst their top consideration before accepting a new job – as far as your business goes, I’d say yes. Whilst they’re unlikely to be the ultimate deciding factor (culture and opportunity will outrank for most in this regard) they can demonstrate a lot about a company culture without the candidate having to step foot in the office.

And companies are getting more and more creative when it comes to what they offer in order to attract top talent. So whilst talking to your employees over a glass fizz this Christmas, ask them what perks and benefits would attract them to your business now and what would urge them to stay.

So you’ve got some suggestions of your own up your sleeve here’s our pick of the Top 10 companies in the UK for perks with details of the ‘little extras’ that make them so great….


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It sucks working on your birthday, but at cloud services provider Rackspace you don’t have to – they give all employees their birthday off work.

It sucks working on your birthday, but at cloud services provider Rackspace you don’t have to – they give all employees their birthday off work.

Body Shop

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In line with their “enrich not exploit” ethos, the cosmetics giant pays staff for five volunteering days per year allowing employees to satisfy their inner altruist.


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Known as the ‘Huddle Cuddle’ – if you get a job at Huddle you’ll be welcomed with a golden hello of £5,000. Yup – you read that right – £5,000.

Swinton Insurance

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The annual  ‘Christmas shopping day’ provided as a perk by Swinton Insurance is highly valued by its employees – particularly those who leave everything to the last minute….


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AutoTrader UK has a wine club, giving employees discounted wine delivered to their door every month. My kind of club….

Peer 1 Hosting

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The HQ at Peer 1 Hosting in Southampton has a giant helter-skelter slide, a tree house, a pub, pool table, a putting green, a giant swing, a cinema, and there’s even a place where putting your feet up is an office rule. 


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To appeal to those with itchy feet, comparisons website Skyscanner lets it staff work in one if its 10 overseas offices (including Miami and Barcelona) for up to 30 days every two years. The UK office has also negotiated employee discounts at the local pub and beauty salon.


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Hip London startup Swiftkey invites guest speakers for lunchtime talks to keep their employee’s minds stimulated and inspired. Celebrities such as Stephen Fry have talked in the past.

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London based now allow employees dogs in the office saving employees £s in annual dog-sitting fees and making everyone that little bit happier.

Mind Candy

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Gaming company Mind Candy has turned their place of work into a play den including every imaginable office toy. Staff can even unwind with a quick game of Guitar Hero.                                                                                                                

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Lead Photo Credit: Canva

Article Photo Credits: cj sorg, Daniel Thornton, Yukariryu, Stav, Chris Frewin, Daniel Godavid reid, Adrain Scottow, Tine Steiss, Brian Turner

Managing Absence Without Being An A*se This Christmas

Most staff will be burning the candle at both ends right now – from a work and personal perspective. So it’s little wonder that sickness levels go up at this time of year. After all, who wants lots of horrible germs floating around the office?

But how do you manage it when the occasional sick day starts to become noticeable and before you can say “ What? Again?”, you’ve got someone who’s clocked up so many sick days that you’ve lost confidence in their ability to actually be there to do their job. I mean, you likely want to be a good boss, but you also need your team to actually be there to do their jobs.

Of course, there is a direct link between happy, healthy employees and the quality and quantity of their output at work and evidence suggests that promoting a happy healthy workforce – including paying attention to the physical environment, creating a supportive sense of community and giving autonomy to people – not only improves people’s performance but also reduces the amount of time people will be off sick. But these are things which be a longer term fix. When you’re the one in receipt of the text or email from someone explaining they won’t be making it to your client meeting or project finale, no amount of chat about Wellbeing Strategy is going to stop your initial reaction being some akin to “Arrggghhh…”

So if you find yourself in this situation:

  1. Take a deep breath: just breathing deeply puts you in a calmer and more receptive mood…
  2. Acknowledge that you have received the message, assume it is genuine ( or suspend any form of disbelief you may harbour that it isn’t) and wish them a speedy recovery
  3. Dust off your own sick policy and take a read to refresh your own memory. Chances are, it will say that anyone off sick need to let you know that they are sick, what the illness consists of and when they are likely to be back. If a reason hasn’t been given, make a note to follow up.
  4. Gather up the information given from any previous communications the individual has provided to get an accurate record of how many days they have been off, what the dates were, as well as any reasons given. It might be that when you take a look at the data you realise that really, your own imagination is exaggerating the time off they have had. But it will also help you spot any obvious trends you can discuss with them when they return if there are any in evidence.
  5. Once they do return (and for the purposes of this article, we’re going to assume they do..if they don’t, then that’s a whole other ball game I’m afraid) ask to speak to them in private
  6. During this meeting – a.k.a the Return To Work interview in HR circles – ask how they are feeling and outline your concerns over the amount and/ or frequency of their absence using the data you’ve gathered in point 4. above. Doing it this way not only helps objectify your point of view, but also serves as a reminder to the individual of their own sickness pattern if they’ve forgotten (and many do).
  7. Ask if there is anything the individual feels could be an underlying cause to all of these periods of absence. At this point, it becomes harder to template your response – an individual might unleash a florid explanation of other things happening in their life or conversely just be very factual – but don’t forget to listen as well ask what they think they can do to help improve their attendance moving forward.
  8. And the end of the meeting, re-cap on anything you have agreed, including any steps they are going to take and any additional support you can provide. And then agree a period you are going to review this over.
  9. Follow it all up in writing. Doing this doesn’t make you an a***, it makes you sensible. And it doesn’t need to be in a physical letter either. Email is fine and far more natural.
  10. And finally. Try and avoid paying statutory sick pay for every instance of sick leave. There may be no statutory obligation to pay above this – however recognising that sometimes people need help when they are sick goes a long way to creating more of a sense of support in your team.

Most sickness is genuine and so treat it as such – but in the unlikely event that you suspect someone really is trying pull a fast one on you, addressing it head on and highlighting that you are monitoring any time off goes a long way to knocking it on the head.

Out of all of these points listed above, it’s Point 6 – actually having a conversation about your concerns over the sickness – which is the one which people most often stumble over and avoid. Often hoping that things will improve if they ignore for long enough or simply because they feel too awkward to address it directly. But there are no laws you are breaking in doing so – although I would counsel not being too brash in the words you choose – and taking another route, such as burying yourself in policy wording  rather than using genuine language, telling someone that they’ve breached their sickness ‘allowance’ or taking any action that penalises someone without talking to them first (I’m talking sick pay, verbal warnings etc). Now, that is being an a*se..

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Check Over Your HR Policies To Protect You & Your Employees This Christmas

The lead up to Christmas can be a bit of an HR minefield. Absence, sickness, expenses and office socialising are all potentially at their highest over the next few weeks. And you’d be wise to check over and circulate your HR policies now so everyone knows what is and is not acceptable in your organisation. Remember that in specifying the boundaries in your workplace you are protecting your employees as well as telling them where the line is….

But writing policies and procedures can be tricky in this day and age. You could spend hours writing and tweaking policies for your business – whatever its size. Online you will find a plethora of policy templates. As a small company though, you don’t necessarily need all of these. You should only put policies in place that are going to be used.  Having a policy for the sake of it is pointless!  Write policies which are meaningful and stand by them.

Legal Requirements

Surprisingly there are only 3 policies that are required by law.

These are:

Best Practice

There are also a number of policies that you should provide because they have legal minimum requirements.

These are:

Pay Legally you must pay your employees at least the National Minimum wage and ensure Equal Pay; you must also provide an itemised pay statement and not make any unauthorised deductions from employees pay
Equal Opportunities Legally you must not discriminate against staff or allow harassment and bullying and you must make reasonable adjustments for staff in the work-place if they are disabled
Working Hours and Overtime including rest-breaks and holidays Legally  you must comply with Working Time Regulations provisions for employees and workers
Sickness policy and unauthorised/authorised absence  Legally you must make statutory sick pay payments to employees and allow them time off for dependant emergencies, Jury Service etc.
Maternity, Adoption, Paternity Leave, Parental Leave and Shared Parental leave You must make statutory maternity / adoption / paternity payments to employees and give the appropriate leave
Flexible Working You must consider all employees flexible working requests

There are few other policies that you could consider to ensure consistency within your business. Policies that may well seem all the more relevant with Christmas round the corner: 

For example:

  • Personal e-mail / Internet Usage
  • Alcohol/Drugs In The Workplace
  • Dress Codes
  • Data Protection
  • Expenses
  • Smoking

There are no legal guidelines for these policies and they can be designed around the needs of your business. For example, no smoking (including e-cigarettes) other than during lunch hour.

Where Do I Start?

When it comes to writing policies copious content is not king.  There are millions of pages of policies & procedures rotting away completely unused in filing cabinets and shared network folders that will attest to this fact. Don’t get fooled into thinking that you need a policy for every eventuality – you don’t. And in fact, too many draconian policies can be restrictive to a small business that is growing.   

The types of policies that you need depend on your business type: If your employees operate heavy machinery then you should consider putting in a Drugs & Alcohol Usage Policy but if you are an accountancy firm then this policy is unlikely to be a priority for you.

It is essential to create realistic employment policies – and enforce them. Using a policy to pay lip service to health and safety or treating employees fairly is not enough. If the worst happens and a problem ends up in court or at an employment tribunal, you’ll need to be able to show that you put your company policies into practice.

Communication Is Key

Policies can be part of your employee/company handbook or you can set them out in a separate document. However, for your discipline and grievance policies, you must either set them out in a written statement of main terms and conditions of employment or refer in a written statement to a place where the employee can read them, such as the company intranet.

You should ensure that you make staff aware that your policies exist. The best time to do this is during the induction process (which doesn’t have to be a 3 day off site event but can be something as simple as a checklist to ensure that a new employee to your company has all the relevant information that they need). You should also make sure that employees can easily access policies if necessary, by having them pinned up on a noticeboard for example or, again, on the company intranet.

Contractual Or Not?

Policies generally aren’t contractually binding unless they expressly state otherwise.  However, the terms of some policies could be seen as contractually binding through custom and practice e.g. where employees follow certain working practices or receive certain benefits over a significant period of time. You need to  be conscious of this as ultimately it will be up to an Employment Tribunal to decide on the contractual nature of policies if a claim were ever to be brought against your company.

Never-Ending Updates

Policies are never finished and you must ensure that you regularly review your policies and procedures to ensure that they are up to date, reflect the needs of the business and reflect any legislative changes.

Effective Company Policies

Whatever your policies cover, you should follow 2 essential principles to make a company policy effective.

1 – Make sure any policy is clear

2 – Make sure that any policy is communicated to employees. Unless employees understand a policy it will not work.

You do not want to tie yourself or your managers up with too many rules as this will only prove to be restrictive to day to day operations.  Equally policies and procedures must be realistic, meaningful and be something that you and your management team are prepared to stand by. There is no point in stating that persistent lateness is a disciplinary offence and then not disciplining the one employee who is late every Monday morning. This type of approach will only lead employees to the conclusion that policies are meaningless, making them almost impossible for you to enforce.  

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