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HMRC internal manual

National Insurance Manual

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

If the gift is a genuine one – 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 “earnings”.

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 ‘gift’ 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. See NIM04004 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.