Preparing for Christmas entails a lot of planning to ensure offices are not short-staffed or important documents delayed because of the holiday. The season is a busy time of the year, when businesses experience changes to their own operations, from upticks in activity to significant slowdowns due to clients and others taking time off to enjoy the holiday.

Office Closures during Christmas

Many employees ask for time off around Christmas to spend time with their family and friends, go on a holiday, or attend religious services. At the same time, Christmas can pose several unique challenges including increased or decreased demand depending on the nature of the business. The holiday season can also leave offices with fewer staff due to a slow-down from clients, suppliers and other stakeholders. This affects work patterns and schedules in different ways.

Christmas Day (25 December) and Boxing Day (26 December) are recognised as bank holidays in England, Scotland, Wales and Northern Ireland. For 2016, Christmas Day falls on a Sunday. The substitute day for the holiday is 27 December. Boxing Day on 26 December is also a bank holiday. Bank holidays, including Christmas, do not have to be given as paid lead to employees. There is no legal right for employees to have either Christmas Day or Boxing Day off as paid or unpaid, unless this is stated in an employment contract. Employers can decide to include bank holidays as part of statutory annual holiday leave.

When considering holiday requests during Christmas, employers need to keep in mind their operational requirements. A situation where the office is under-staffed must be avoided. At the same time, employers should demonstrate flexibility during this time of the year. Employers should communicate a fair and consistent policy with respect to approving holiday requests for Christmas. One way to be fair is to solicit holiday requests well in advance of Christmas. By having all requests in at the same time, employees have an opportunity to better assess operational needs. If business is usually slow, some employers shut the office for a certain period during Christmas. In these cases, the days off count towards employees’ holiday entitlement for the year.

Office Parties and Events

Throughout the UK, businesses and other organisations celebrate the holidays with office parties and other events. These occasions are opportunities to celebrate achievements during the past year and recognise individuals. Planning an office party or another Christmas-time gathering can be a significant investment, depending on the nature of the event.

Planning your event well in advance will help ensure success. The first step is to decide on who will plan and organise the event. This could be an individual or a committee with representatives from different units in the office. Having a clear budget and objectives will also make things go smoother. The event should be fun for everyone. Surveying staff is a good way of narrowing down options. Alternatively, employers can provide options and allow staff to vote on their preferred choice.

Employers have certain National Insurance and reporting obligations when they organise a social function or party for their employees. This is not the case with Christmas parties and events. Annual events like Christmas functions are exempt from reporting to HM Revenue and Customs (HMRC). Employers also do not have to pay tax or National Insurance for annual events.

Gifts

Providing gifts to clients and staff is a way of showing appreciation while commemorating the holiday season. Before sending a Christmas gift, make sure that it will not offend the recipient due to their religious beliefs or non-beliefs. For non-religious staff and clients or individuals that follow a faith that does not celebrate Christmas, gifts could be sent before New Year’s Eve as a way of recognising contributions or achievements during the preceding year.

Employers have certain tax and National Insurance responsibilities as well as reporting obligations when providing gifts to employees. Specific rules depend on the nature of the gift. Generally, Christmas gifts must be reported and are subject to tax and National Insurance deductions. A Christmas cash bonus counts as earnings. Employers must add this amount to the value of the employee’s other earnings. They also need to deduct and pay Pay As You Earn (PAYE) tax and Class 1 National Insurance through their payroll. Goods given as Christmas gifts must also be reported. Since the gift is a benefit, a P11D form must be completed and Class 1A National Insurance needs to be paid on the value of the gift. Employers can claim VAT on the cost of an employee’s gift.

Generally, there is no tax relief for Christmas gifts provided to clients and other business partners since they are considered entertaining. Exceptions include promotional items that are used for advertising the business to the public, such as free samples. An item with a visible advertisement that has a value of up to £50 and is not food, drink, tobacco or an exchangeable voucher is exempt. VAT must be assessed on the value of gifts over £50 unless the item was a free sample. Gifts are tax-free if it is given to a recognised charity, the National Heritage Memorial Fund, and the Historic Buildings and Monuments Commission for England.

Post Delivery

Whether you are sending out cards to your clients or are sending business-related documents before Christmas, timing is essential. The cut-off dates for guaranteed delivery depends on the method you send your item and which carries you use. FedEx, UPS, Royal Mail, Parcelforce, and other delivery services offer different shipping methods and their cut-off dates vary. You should contact your regular delivery service long before Christmas to determine the best shipping method and the recommended shipping date.

To avoid delays, the Royal Mail recommends posting items well in advance before the last-minute Christmas rush. All 2nd Class and Royal Mail Signed For mail should be sent by 20 December, while 21 December is the cut-off for 1st Class and Royal Mail Signed for items. The deadline for Royal Mail Special Delivery Guaranteed is 22 December and the last date for Special Delivery Saturday Guaranteed is 23 December. For international mail by air, cut-off dates range from 3 December for Africa and the Middle East, 7 December for Asia, 10 December for Australia and New Zealand, 14 to 16 December for most European Union destinations, and 15 December for North America. Surface mail with International Economy from Royal Mail must be handed in well over a month before Christmas. For exact dates, visit www.royalmail.com/greetings.

For information on how to have a Tax Free Office Christmas click here.