We are often asked about what HMRC terms Trivial Benefits. Here we provide you with a brief overview.
A Trivial Benefit is where you have given an employee a gift, including a meal, and the following applies:
- The item cost you £50 or less to provide – should the item be over the £50 limit, the whole value of the item will be taxable
- It isn’t cash or a cash voucher
- It isn’t a reward for their work or performance
- It isn’t in the terms of the employee’s contract
In these circumstances you do not need to pay tax or National Insurance or let HMRC know about the gift, for example on P11D forms.
You can provide multiple items for an employee during a tax year, as long as the above criteria is met; for example you could provide employee A with three gifts during the year, as long as they are each under £50 they can be classed as a Trivial Benefit.
If the benefit is provided to someone who is a director or other office holder of a ‘close’ company, this individual can also receive gifts costing £50 or less, but they have a limit of no more than £300 of trivial benefits in any one tax year. A ‘close’ company is a limited company with five or fewer participators (shareholders) who are all directors.
This is in addition to the annual staff party exemption of £150 per head.
If you have any queries regarding Trivial Benefits please contact Jackie or Andrew on 01625 524127 or contact us here.