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Trivial benefits

Tax free trivial benefits

The conditions

The following conditions must be met for tax-free trivial benefits.

  • Each time when you provide a trivial benefit the value must not exceed £50.

  • In case of group benefit where it is impractical to work out the exact cost per individual, the average cost per employee must not exceed £50.

  • Must not be a cash payment (gift vouchers are allowed, providing they can’t be exchanged for cash)

  • Must not be part of any contractual obligation, including salary sacrifice arrangements.

  • Must not be pay for services that are performed as part of regular employment duties

Be careful:

  • do not spend one penny more than £50, otherwise the full value of the benefit will become taxable. This is also not a round sum allowance.

  • if trivial benefits are provided to employees as part of a salary sacrifice arrangement, they won’t be exempt

Trivial benefits for directors – conditions listed above will apply

If you are a director, you will still be able to receive trivial benefits, as well as providing these to your family members. However, if you’re a director of a “close company” (one with 5 or fewer shareholders), there is an annual cap of £300.

If you do provide trivial benefits to other family members who are not employees or directors, these will be included as part of your directors’ allowance for the year.

Examples of what you can do to treat yourself and your employees

The gift itself could be anything, providing the cost is below £50 per head and is not in cash. For example, store gift cards, flowers, chocolates, wine, hampers or even taking staff out for a meal.

These trivial benefits are in addition to the annual staff entertaining exemption of up to £150 per annum, per attendee and therefore will help increase morale, whilst reducing your corporation tax liability.

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