Posted May 11, 2020
What are trivial benefits and what are the rules you need to follow?
In 2016 the regulations for trivial benefits changed. Before the change employers could provide tea and coffee and perhaps a small seasonal gift to their employees without having to disclose the cost on a P11D or within a PAYE settlement agreement. Under the new rules there is more flexibility and provide you stick to the following conditions you can provide tax-free benefits to your employees:
The benefit MUST NOT:
- Exceed £50
- Be a cash payment (gift vouchers that cannot be exchanged for cash are allowable)
- Be part of a contractual obligation
- Be in payment for services that are performed as part of their regular employment duties
You need to make sure that you do not spend more than £50 otherwise the full value of the benefit is taxable (not just the amount over £50).
These trivial benefits are in addition to the annual staff entertaining allowance of up to £150 per year per employee.
If you are a director, you can still receive trivial benefits but there is an annual cap of £300. Any trivial benefit provided to family members that are not employees will be included in your £300 annual allowance.