Would an actual holiday as bonus from employer be taxable benefit??

[bubbakin]

My husband has had a very good year at work & in recognition for his efforts his employer has introduced a 'holiday in a lifetime' bonus. It is not vouchers to chose a holiday of our choice (unfortunately) but a holiday - to be taken with other colleagues that have over achieved this year & their partners to a set destination, all expenses paid no expense spared!! Will he pay tax on this?? He is a higher rate tax payer & there is talk of the holiday costing over £5k a couple for 4 nights!! Last year he received £1k in vouchers & we were taxed £400 for them!! Thank you

It completely depends on how it is accounted for within the company finances so you'd have to get in touch with his HR/Payroll for an answer.

If they are going to account for it as a bonus remuneration then yes, it will be taxable.

On the other hand, it may be that they are doing it this way precisely because of gripes about the bonus vouchers being taxed last time - they may have found a way to categorize it as business expenditure as if it was conference attendance or going to a meeting abroad - in which case it wouldn't be.

Thank you for the clear explaination. His employers are the sort that wouldn't care if people were taxed on vouchers or complained about it! He'll hopefully find out today if holiday is definite, if so I'll get him to call paye dept. If it is taxable then have to think long & hard as I'd rather spend a couple k on family holiday than an ott lavish one for me & DH. Thank you

I wonder whether someone higher up in your DH's company is married to someone in the travel & tourism industry and is using the bonus scheme to drum up business?

I wonder if the vouchers last year didn't drum up enough business because the plan was that people would fork out plenty of their own cash to supplement the vouchers, but people preferred not to and they have done a nice cosy deal this way instead to ensure maximum profits for the travel company...

Sorry didn't make it clear, the 1k of vouchers in jan were capital bond vouchers so nothing to do with travel! So don't think any connection to travel industry.

If the employers have a PAYE settlement agreement in place that covers this type of benefit, the employers can pay the tax on it on behalf of the employee, but this isn't a common thing for them to do.

Info for employers on here www.gov.uk/paye-settlement-agreements/whats-included

Yes, a holiday paid for by the employer is a taxable benefit. In most cases I've done it the company has also paid the tax as otherwise it's not actually much of a reward!