Treasury lifts tax on turkeys after boss is landed with ?6,000 bill for giving birds as gifts

Turkeys now have even more reason to dread Christmas after the Treasury announced yesterday that employers can hand out the birds as festive gifts to staff without fear of it being taxed as a benefit in kind by the Inland Revenue.

The Treasury in beneficent mood revealed yesterday it had relaxed its guidelines to employers last month.

Officials announced the plan after the Conservatives issued a complaint that one company director in Hampshire had been landed with a £6,000 tax demand for turkeys that he had given to each of his 115 staff for the last six years. The revenue had been demanding up to £17 in tax for one turkey, treating the gifts as a payment in kind.

The Conservative Treasury spokesman George Osborne had criticised the Inland Revenue scrooges in a press release, saying: "This is a shabby way to treat people who want to spread a little cheer at Christmas. How mean can the Inland Revenue get? In Gordon Brown's Britain, Bob Cratchit's house would have had to pay tax on Tiny Tim's goose because it was a gift from Scrooge, Charles Dickens must be turning in his grave."

Mr Osborne, widely tipped as a future Tory leader, then adds a literary note almost as long as the original press release. In this, he explains to editors that Scrooge did not like Christmas, was mean and after being visited by three ghosts on Christmas morning sent a large goose round to Bob Cratchit's house to make amends.

The Treasury yesterday dismissed the press release as "not only inaccurate, but patronising". Officials revealed that the Treasury had last month told the Inland Revenue that turkeys would no longer be treated as a benefit in kind and therefore no longer liable to tax - a generous reform that apparently tears up guidance on turkeys in place since 1948. "This is the first year that turkeys will not be taxed," said the Treasury.

The Treasury added that the director, Martin Weeks, would not be required to pay tax on the turkeys handed out in the five years before the edict was issued. It said an over-eager local official had not been informed by his line manager of the new guidelines.

Mr Dickens will, despite Mr Osborne's well meaning fears, remain stationary in his grave this Christmas.