Trivial benefits provided by an employer

Introduced in the Finance Bill 2016 the trivial benefit in kind exemption has been introduced. Any exempt trivial benefits provided by an employer to an employee will no longer be counted towards taxable income or Class 1 NIC and need not be reported on the P11D.

A trivial benefit has to satisfy the following conditions to qualify for the new trivial benefits in kind exemption:

• The benefit is not cash or a cash voucher (shop gift vouchers are allowed)
• The benefit cost (either the cost of providing the benefit, or the average cost where provided to multiple recipients and it is impractical to calculate the individual cost) does not exceed £50
• The benefit is not provided pursuant to relevant salary sacrifice arrangements or any other contractual obligation
• The benefit is not provided in recognition of a work related duty or employment duty

An additional point to note for close companies (most small limited companies) where the employee is also a director or office holder that the limit is increased to £300 per tax year. This amount can be extended to their family and other household members.

Some examples of allowable trivial benefits include buying each employee a Christmas present, flowers on a birth of a new baby, gift on an employee’s birthday.

Be careful though as if the benefit exceeds the £50 limit per head (£300 for directors) then the whole amount becomes taxable as a benefit in kind, not just the excess over the limit.

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This post was written by Daisy