Trivial Benefits: what are they and what are the rules?

Meeting certain conditions from HMRC when gifting an employee is known as a 'trivial benefit'. You won't need to pay tax or National Insurance or let HMRC know if all of the following apply:

  • The cost of the benefit must not be over £50

  • The benefit isn't cash or a voucher redeemable for cash

  • It isn't a reward for their work or performance

  • It isn't in the terms of their contract

You will have to pay tax on any benefits that don't meet all of this criteria.

If the cost of the benefit is over £50, the whole amount is taxable, not just the excess over £50. If it is a group event, you are allowed to calculate the average cost per employee.

If you're a director of a 'close' company you can't receive trivial benefits worth more than £300 in a tax year. A 'close' company is classed as a limited company run by 5 or fewer shareholders.

If you're thinking of gifting an employee, bare these rules in mind to ensure that you are also benefiting.

Need help? Speak to one of our experts on 0800 690 6355 or arrange a free consultation.

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