NIM02165 - Class 1 NICs : Earnings of employees and office holders : Gifts

If the gift is a genuine one 鈥� that is, a personal and unexpected gift made from an employer* to an employee, given as a gesture of goodwill, or as a token of gratitude - the payment is not earnings and, therefore, no NICs are due. See NIM02010 regarding the meaning of 鈥渆arnings鈥�.

If the payment is described as a gift, obtain and check all papers relating to the payment.

If the gift is made in cash, ensure that the employer is not using the 鈥榞ift鈥� to hide some other form of payment.

If an employee receives a gift other than in cash, check to see what form the payment of the gift takes. Class 1 NICS may be due if the gift is made by way of:

  • a financial instrument or voucher which may be traded for a financial instrument, or
  • a tradeable commodity or voucher which may be traded for a tradeable commodity.

See NIM42000 for further information.

* If the gifts are provided by an employer that is a company, the company is not an individual and therefore it cannot be considered a personal gift, Class 1A NICS may be due, see NIM16370 for further information.