Under the “trivial benefits exemption”, businesses can provide a tax-free gift to staff, as long as the gift costs less than £50 each. There is no cap on the number of trivial benefits that a member of staff receives. This exemption won’t cover gifts where:
- The cost of providing the benefit exceeds £50
- The benefit is cash or a cash voucher
- The employee is entitled to the benefit as part of a contractual obligation
- The benefit is provided in recognition of particular services performed by the employee as part of their employment duties.
Directors of close companies (ie. a company with five or fewer shareholders) are subject to the same rules. However, they have cap on the total value of the benefits during the year. This cap is set at £300 per year. Gifts made to a Director’s family member or member of the Director’s household will also count towards the Director’s £300 limit.
If you have any queries regarding the trivial benefits exemption please contact Jackie or Andrew on 01625 524127.