Benefits provided to an employee by someone other than the employer (often known as ‘third party benefits’) are taxable on the employee if they are provided by reason of their employment. For example, if you work at a car dealership and receive an award from a ‘third party’ car manufacturer.
HMRC’s guidance cites case law on this issue. One of the cases quoted surmises that ‘by reason of the employment’ covered cases where an employee would not have received a benefit unless he had been an employee. Further, the employment must be one of the causes of the benefit being provided. It need not be the sole cause or even the main one. But it must be an operative cause in the sense that it was a condition of the benefit being granted.
In practice you can normally assume that a benefit which is provided by someone other than the employer and which is plainly connected with the employee’s employment has been provided by reason of the employment. Some third party benefits, small gifts and corporate entertaining and hospitality, are exempt from tax.