As an employer providing vouchers to your employees, you have certain tax, National Insurance or reporting obligations.
This includes vouchers that are:
- exchangeable for cash
- only exchangeable for goods or services
There are different rules for childcare vouchers.
What to report and pay
What you have to report and pay to HMRC depends on whether the vouchers are exchangeable for cash.
Vouchers exchangeable for cash
These vouchers count as earnings, so you’ll need to:
- add their value to the employee’s other earnings
- deduct and pay PAYE tax and Class 1 National Insurance through payroll
Vouchers exchangeable for goods and services only (non-cash vouchers)
- report the value on form P11D
- add the cost of the vouchers to the employee’s earnings when deducting Class 1 National Insurance (but not PAYE tax) through payroll
There are some non-cash vouchers that you don’t need to deduct Class 1 National Insurance on. See a list of exempt vouchers.
You’ll still need to report these vouchers using the same reporting method as other non-cash vouchers.
Last updated: 8 July 2016