Dec 11, 2023
It's rare for an idea to benefit businesses, their employers and the wider economy all at once, but that's what our Giftcard500 campaign is all about.
As things stand, businesses can give employees a gift card or voucher up to the value of £50 tax free.
£50 isn't a lot - especially given recent high inflation - so we're campaigning for that tax free threshold to be increased to at least £500.
There are all sorts of benefits.
Businesses could do something significant for their staff, without having to worry about the tax implications. Whether it's motivated by a desire to recognise a birthday, or their efforts for the year, or something to help with the cost of living. It can support the retention of a skilled team, and as part of a broader salary and benefits package it can help recruitment too.
What's in it for employees is obvious - the benefit from something extra aside from their pay packets, where they don't have to worry about tax.
The broader economic impact can have a big impact too, and one government ought to pay attention to.
The last few years have brought unprecedented challenges to the retail, leisure and hospitality sectors - they've weathered a pandemic and the operating restrictions that went with it, rising supplier costs, and a cost of living crisis that's putting pressure on customers’ wallets.
These problems aren't going away in a hurry - we can see the reality of it in the country's growth forecasts. After November's Autumn Statement, the Office for Budget Responsibility reduced its forecast to just 0.7% growth during 2024.
That follows growth of just 0.6% in 2023.
What we know is that, despite that backdrop, sales of gift cards and vouchers were up 8.4% in the first half of 2023, compared to the same period in 2022.
So, it's clear the demand is there.
We also know that for our members that totals £1.35bn in value during that period, and across the industry as a whole gift cards and vouchers are worth much, much more.
During 2022, our members’ gift card and voucher sales were worth £3.2bn, and our research estimates that shoppers‘ top-up’ gift card purchases with an extra 66.4% from their own pocket.
That means the economic stimulus is substantial, and beyond anything given to employees in cash.
That's because not only must a gift card be spent, not saved, it can also be targeted to specific sectors, or specific geographies, to support a tailored stimulus aimed at local high streets.
Unlike other adjustments to the tax system, increasing the Trivial Benefit Allowance would also get money to the frontline quickly - our research suggests the over whelming majority of gift cards and vouchers are spent within 12 months of being received.
Given the headwinds the economy faces, and the struggles of employees and businesses to deal with those headwinds, we believe an increase in the Trivial Benefits Allowance to at least £500 would be a straightforward way to make a difference quickly.
Similar changes have already been made elsewhere, including Ireland, Italy and Sweden.
During 2024, we're going to be campaigning for that change to happen here in the UK too, gathering evidence and building support - we urge you to join us in that effort. Thank you to our first phase GCVA Members supporting partners Prezzee, Miconex, Edenred, Love2Shop,Motivates, Blackhawk Network, Tillo.