HMRC allows Employers to give their staff small gifts tax free. This little tax break is known as Trivial Benefits.
Here are the rules surrounding Trivial Benefits for 2018/2019.
HMRC Trivial Benefits 2018/2019
If you buy your employee a small gift it can be given tax free if it meets ALL the following criteria:
- it cost you £50 or less to provide
- is not cash or a cash voucher
- isn’t a reward for their work or performance
- it not included in the terms of their contract
Any gift that meets this criteria will not attract the additional tax or national insurance that other benefits in kinds do. For example a car or fuel allowance. You also do not need to let HMRC know about trivial gifts you have provided.
HMRC Trivial Benefits 2018/2019 & Salary sacrifice arrangements
trivial Benefits provided as part of a salary sacrifice arrangement are NOT exempt. In these cases the amount will need to be reported on a P11d Form using the value which is the higher of:
- the salary given up
- how much you paid for the trivial benefits
HMRC Trivial Benefits 2018/2019 & Company Directors
HMRC have a further set of rules in place which applies to Limited Company’s run by 5 or less shareholders (known as a Close Company).
In these cases each Director of the Company cannot receive trivial benefits worth more than £300 in a single tax year.
Examples of Trivial Benefits
If you are searching for ideas that fit in the box of Trivial Benefits, then here are a few ideas:
- Restaurant voucher (that cannot be exchanged for cash);
- Gift voucher (that cannot be exchanged for cash);
- An experience;
- A meal;
- Food hamper.
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