Keighley businesses are warned that the taxman is entitled to a slice of the pudding when employees are given Christmas gifts and bonuses.

A recent increase in the minimum wage means more employees are now earning above the £8,500 threshold, which must be declared to the Inland Revenue.

The threshold includes all benefits provided to the employee, or members of the family and household, together with any reimbursed expenses. Nigel Westman, a partner at Keighley-based Clough & Company, said: "Very few businesses are aware that they are legally required to declare nearly all their employees' Christmas gifts, including bottles of wine and cakes, to the tax man.

Following the minimum wage increase even more employees are now subject to this legislation.

"Employers must enter into a PAYE settlement agreement with the Inland Revenue so that tax can be paid on gifts.

Otherwise, if the employee is to be held responsible, gifts should be added to P11Ds."