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Introduction

This guidance note covers the treatment of vouchers, whether in the form of a cash voucher, non-cash voucher or credit-tokens. These terms are all defined in the legislation and explained further below. Generally, If an employer provides a voucher or credit-token to an employee, it is a benefit and so tax and NIC are due. It is important to identify which category the item falls into so that the value of the benefit can be correctly determined and reported.

Many of the tax and NIC rules in relation to vouchers and credit tokens were originally devised back in the 1970s to deal with novel reward methods devised by employers (sometimes these methods were used to circumvent ‘wage freezes’ applied by the Governments of the day). Whilst these rules may now therefore seem a touch anachronistic, they remain on the statute books and must still be recognised.

If the costs to the employer represent vouchers (whether cash, non-cash or credit token) provided to a number of employees, the costs are apportioned to each employee on a just and reasonable