Althams Travel has given all its staff a £500 cost-of-living payment after putting in a plea to government to allow businesses to make discretionary, tax-free bonuses to employees.
The one-off payment, made just over a week before Christmas, has been handed out to all 220 of the company’s staff, across its 31 branches and head office.
Managing director Sandra McAllister announced her intention at the recent managers conference but held off releasing the bonus until she had heard back from the government. She had hoped to be able to give staff the full £500 exempt from income tax and National Insurance contributions.
“I approached Rishi Sunak in September as I could see what happening down the line and I thought it would be nice if businesses were able to help their staff, even if it was just to give £200, without it being taxed,” said McAllister, whose local MP is prime minister Rishi Sunak. McAllister met Sunak in 2021 to discuss the plight of the travel trade in the pandemic.
She added: “I did get lots of positive responses from government that they were looking at it and they kept in touch. I chased them right up to the last minute but in the end I got a letter from chancellor of the exchequer Jeremy Hunt to say they felt it would help those who didn’t need it.”
In a letter, Hunt thanked McAllister for her proposal but said: “The Government remains committed to managing the public finances in a disciplined and responsible way by targeting support where it is most needed. Tax reliefs are difficult to target in this way; they are of greatest benefit to those paying higher rates of tax while low-earning individuals with income below the personal allowance or the higher rate threshold would benefit less or not at all.
“It is likely that a new relief would have to be paid for, at least in part, by increased taxes for other taxpayers or reducing expenditure on public services.”
McAllister, who introduced a four-day working week across the business earlier this year, said some staff were brought to tears on receipt of the payment.
“Staff were thrilled and really appreciated it,” said McAllister, who added: “They deserve this money and I wanted to pre-empt any issues they might have with the cost of living over the next two to three months. If I could have given more I would have.”