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Introduction

This guidance note covers situations in which employers either provide or pay for an employee’s holidays. For the tax implications of holiday pay, see the Holiday pay guidance note.

Provision of holiday

The payment for, or provision of, a holiday by an employer to an employee always gives rise to tax, NIC and reporting requirements. There are no exemptions within any of the tax legislation for this benefit. Which of the parties arranges and how the employer actually pays for the holiday determines how the benefit is reported and taxed. The reporting requirements associated with the variations are outlined below.

Reporting requirements