What is a trivial benefit?
A trivial benefit is a tax free gift to the cost of £50 or less that an employer can give employees occasionally.
You don’t have to pay tax on a benefit for your employee if all the following apply:
- it cost you £50 or less to provide
- 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 their contract
You don’t need to pay tax or national insurance or let HMRC know.
You do have to pay tax on benefits that do not meet all these criteria.
Salary sacrifice arrangements
If you provide trivial benefits as part of a salary sacrifice arrangement they won’t be exempt and you will need to complete a P11D and report whichever amount is higher – the salary given up or how much you paid for the trivial benefit.
Directors of ‘close’ companies
You can’t receive trivial benefits worth more than £300 in a tax year if you are the directors of a ‘close’ company.
A close company is a limited company that is owned by 5 or fewer shareholders.
