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(or in HMRC speak “Trivial Benefits provided by an employer”)

If you provide a small gift/benefit to an employee no tax will be due if the following conditions are met:

• A – the benefit is not cash or a cash voucher (e.g. a John Lewis voucher is OK as cannot be exchanged back for cash)
• B – the benefit cost does not exceed £50
• C – the benefit is not provided as part of salary sacrifice arrangements or under any other contractual obligation
• D – the benefit is not provided in recognition of particular services performed by the employee as part of his/her duties, nor in anticipation of such. (e.g. Cannot be provided as an incentive for working a bank holiday weekend, or for hitting particular targets)

For most employees there is no limit to the number of trivial benefits an employee can receive in a year.

However if the employer is a close company and the employee is a director or office holder of the company or a member of the family or household of such person an additional condition applies

• E – The total annual amount of trivial benefits that can be paid without tax falling due is £300.

Examples of trivial benefits (note £50 rule must apply to each):

• Voucher
• Meal out for staff which costs less than £50 per head
• Flu jab (imagine your employee’s face if you told them they were going to be taxed on the cost of the flu jab you provided for them)
• Birthday present
• Christmas present
• Summer garden party which costs less than £50 per head

If you have any questions on this article and how it affects you and your business, please get in touch here.

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