Employers urged to back gift cards as campaign launched

The government has been called on to increase the tax-free employer gifting allowance in a bid to boost the high street.

The Gift Card & Voucher Association (GCVA) has this week launched the #GiftCard500 campaign, asking government to increase the gifting allowance currently permitted through HMRC’s Trivial Benefits Allowance from £50 to £500.

This will allow employers to thank staff for their hard work over the past few months of coronavirus-related uncertainty.

The campaign has been backed by retailers including Marks & Spencer and Dixons Carphone, sector ambassadors including James Wallman, futurist and author of Time and How to Spend It, and gifting and incentive businesses National Book Tokens, Reward Gateway and Blackhawk Network, among others.

The GCVA has also written to the government, including members of the Treasury and the assistant director of consumer policy and enforcement, petitioning them to raise the tax-free limit and offer their support in implementing the scheme. An online petition has also been launched to lobby the government to make this change.

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It has estimated its proposed increase in the gifting allowance could deliver a boost of over £2bn to Britain’s high street – based on one in 10 paid employees being rewarded with a £500 gift card, plus 67.1% in-store uplift – which it said would help to safeguard thousands of jobs.

Eoin Whyte, chair of the GCVA executive board, told HR magazine: “Gift cards are not only a perfect way for employers to reward their staff for all of their hard work, but they are a great way to benefit the economy as they can be spent in a targeted way.

“Gift cards help to specifically drive footfall at high street businesses, and rather than being put into employees savings or rent and bills, as can often be the case with cash bonuses, gift cards allow employees the flexibility to purchase something they’ll truly value.”

Gift cards are now a £7bn per year industry and overtook physical gifts during lockdown, the GCVA said.

Fourteen per cent of shoppers bought a gift card for somebody else in the lockdown period, outselling physical gifts at 12%, while 21% of consumers purchased gift cards to support their favourite businesses.

“While some people will inevitably always prefer physical gifts, many are likely to have realised the numerous benefits of gift cards as a safe, flexible and socially distanced way to show loved ones how much you care,” said Whyte.

“We would predict at least an occasional shift to gift cards to be permanent for many. The widespread availability of digital gift cards and mobile wallet enabled features now coming on stream further underpins this trend.” The GCVA’s online petition can be found here.