The benefits of tax-free vouchers

Tax-free vouchers are a great way to pay staff a bonus for Christmas and can boost local retail economy too.  The rules on tax-free vouchers for 2017 remain unchanged. However, you need to buy the vouchers – up to the value of €500 – before the end of the year.

If you are an owner/director of your own business, and your spouse is also an employee/director, then you can double that benefit to €1,000.

If cash flow is not a major issue for you at present, then now is the time to buy. This is why this benefit works so well as a Christmas bonus. If you’re in business with a partner, and both of you have spouses as directors/employees of your company, then you are looking at €2,000 in tax-free benefits!

tax-free voucher registration
Tax-free vouchers are a double bonus for business owners. Image: Shutterstock

The background to tax-free vouchers

Last year, the threshold was doubled from €250 to €500 for this measure. This is often used by companies to give their workers Christmas bonuses of shopping vouchers. It’s particularly popular with owner/managers of small businesses who are directors of their own business. This is because so many also have a spouse who is also an employee/company director of the business. From the point of view of business owners, the scheme has some great advantages.

Tax free vouchers to save money
Tax free vouchers (Image Shutterstock)

To sum up, tax-free vouchers are:

·         A tax-efficient way of rewarding your staff

·         As the benefit is only tax-free for one single payment, they are ideal as a Christmas bonus

·         It’s a double win for owner/managers who are directors/employees of their business and whose spouse is also a director/employee – they could benefit from up to €1,000 tax-free….

To find out more about the tax-free vouchers scheme, check out these FAQs from the Revenue Commissioners here.

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