Tel: 01736 795753
This email address is being protected from spambots. You need JavaScript enabled to view it.

Tax-free trivial benefits

Source: HM Revenue & Customs | | 06/03/2018

There is no tax to pay on trivial benefits in kind (BiK) provided to employees where all of the following apply:

  • the benefit is not cash or a cash-voucher; and
  • costs £50 or less; and
  • is not provided as part of a salary sacrifice or other contractual arrangement; and
  • is not provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.

The tax-free exemption would apply to small non-cash benefits like a bottle of wine or a bouquet of flowers given occasionally to employees or any other BiK classed as 'trivial' that falls within the exemption.

The rules provide an excellent opportunity to give small rewards and incentives to employees without any further tax implications. The main caveat being that the gifts are not provided as a reward for services performed or as part of the employees’ duties. However, gifts to employees on milestone events such as the birth of a child or a marriage or other gestures of goodwill would usually qualify.

The employer also benefits as the trivial benefits do not have to be included on PAYE settlement agreements or disclosed on P11D forms. There is also a matching exemption from Class 1 National Insurance contributions. However, trivial benefits provided as part of a salary sacrifice arrangement are not exempt.

Planning note for directors

The rules also allow directors or other office-holders of close companies and their families to benefit from these allowances, but with an annual cap of £300. The £50 limit remains for each gift. The £300 cap doesn’t apply to employees. If the £50 limit is exceeded for any gift, the value of the benefit will be taxable.



Search Archive


Latest News

Keep abreast of Brexit news
19/03/2019 - More...
As the Brexit date fast approaches, it seems the only thing we can say with any certainty is that

Present tax-free company benefits
19/03/2019 - More...
The list of company benefits that can be provided tax-free to employees is quite short. However,

Changes to VAT IT systems if no-deal Brexit
19/03/2019 - More...
In a letter being sent to businesses across the country, HMRC has published the following

Search

Our Address

Greenwood Wilson
The Old School
The Stennack
St Ives
Cornwall
TR26 1QU

Contact Us

tel: 01736 795753
fax: 01736 798642
This email address is being protected from spambots. You need JavaScript enabled to view it.

Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login