Trivial Benefits

Do you have employees and want to buy them birthday, wedding or other occasional gifts?

You may be wondering whether your company or employees will need to pay tax on them.

A gift may qualify as a tax-free trivial benefit when all of the following conditions are met:

1. It costs £50 or less, including VAT.
2. It is not cash or a cash voucher.
3. It is not given as a reward for an employee’s work or performance.
4. It is not provided as part of an employment contract or salary-sacrifice arrangement.

If you take a group of employees out for a meal, divide the total cost by the number of attendees. It may qualify as a trivial benefit if the cost is £50 or less per person and all the other conditions are met.

Company Directors

Directors of close companies may also receive trivial benefits when the above conditions are met. However, qualifying benefits are limited to a total of £300 per director in each tax year.

Record Keeping

Keep an accurate record of every trivial benefit provided, including:

• The date it was provided.
• The amount spent.
• The reason for the gift or benefit.
• The names of the recipients or attendees.
• Receipts and any relevant correspondence.