19 December 2016
Christmas is the busiest time of the year for a lot of SMEs particularly those in retail and hospitality with employers having a lot to juggle at this time.
Not only are they concentrating on having a good season and dealing with competition from competitors both local and online, and heavily advertised Christmas Markets in both Irish and foreign cities, they may have staffing levels to consider. They need to decide how many, if any, temporary staff they may need to have available to cover extra business and sick leave, and deal with all the paperwork that goes with taking on extra people.
They must make judgement calls on how much of what in extra stock they need to order. They also need to figure out the logistics of delivering or receiving goods by courier or post at this extra busy time and be aware of final shipping or posting dates. Premises and websites need to be spruced up and attractive to potential customers.
Storage facilities and premises will need to be secure and safe from threat of robbery and issues such as power failure or burst pipes.
On top of all this they must also consider their employees who are themselves looking forward to enjoying Christmas, and what measures they as employers are taking to contribute to that enjoyment.
Many employers like to give an extra reward to their staff for their loyalty and work throughout the year. If this is a cash gift the employee is liable for income tax, PAYE, PRSI, USC and/or benefit-in-kind tax.
Non cash gifts up to the value of €500 are exempt from tax, which makes vouchers and gift cards a very popular way to give gifts to employees. Vouchers and gift cards have the extra advantage of being a boost to the retail sector. The vouchers must be a gift and cannot be instead of pay or part of a pay cut, and employees can only receive one in the year.
Also, this year the welfare Christmas bonus of 85% of normal payment was paid to 1.2m people who are in receipt of social welfare, including pensioners, people with disabilities, carers, lone parents and long term unemployed. Not only is this a welcome boost to the recipients but it is also an injection of €221m into the economy and in particular into the retail sector.
Customers and clients
Gifts to customers and clients are allowable as a tax deduction if: the total cost of gifts to any one individual per annum does not exceed €50, bears a conspicuous advert for the business and is not food, drink, tobacco or exchangeable vouchers unless they are samples of a traders product. Nonetheless food and drink are popular choices for gifts.
In many cases customers will appreciate just a Christmas email or card showing they are valued. Companies also use promotions and competitions to build rapport with customers, and hosting or sponsoring a local or community event is a sure fire way of building reputation.
Christmas work parties
At the height of the recession 85% of employers cancelled the annual Christmas party for staff but over the last few years it has made a major comeback with well over half of employers holding a work party this year. The Christmas party is seen by most employers as a chance to build staff morale and show appreciation to staff for their work and loyalty throughout the year.
Unfortunately the staff party can come with more headaches for employers than the inevitable hangovers.
Alcohol and an outside of work location can alter the normal bounds of acceptable behaviour. Inhibitions can be loosened and grievances can suddenly be aired. However, the Christmas party is seen as an extension of the workplace and employers can be held responsible for mishaps or misbehaviour involving staff. Any complaints or grievances such as harassment, sexual harassment, bullying or social media bullying need to be dealt with by following company procedures in these matters, as the Equality Tribunal takes a very dim view of employers not dealing with these issues on the basis that it was at a Christmas party. Prior to the Christmas party might be a good time to highlight company policy on these matters, reminding employees that it applies to work related social events and also reminding them of the consequences of publishing photos online which may infringe somebody’s right to privacy or damage their reputation.
Adopting measures such as, vouchers for drinks rather than a free bar and ensuring the event includes food, could also go some way to ensuring a pleasant and safe event for everyone.
Full-time workers have immediate entitlement to benefit for public holidays and part-time workers have entitlement to benefit when they have worked 40 hours in the previous 5 weeks.
Christmas Day, Stephens Day and New Year’s Day are public holidays. Christmas Eve is not a public holiday.
Naturally many staff will want to take additional leave around Christmas and bad weather can contribute to staff absences leading to extra pressure on employers to be fair to everyone and have enough trained staff available for busy days.
All this, while financially rewarding, hopefully, can take its toll on managers and owners of SMEs. Figures show that over the last couple of years: