employers – make use of new “trivial benefits” exemption

Employers can make small gifts to employees WITHOUT paying tax or National Insurance on the money involved.

The basic rule is that an employer can now provide what are termed “trivial benefits” (e.g. a bunch of flowers, a box of chocolates, a meal out) without having to declare them on the expenses/benefits declaration form P11D and without any tax or National Insurance for either employer or employee.

The employer will also be entitled to claim income tax or corporation tax relief on the cost.

The three key conditions are:

  • the trivial benefit must cost no more than £50
  • the benefit must not be a reward for services or in any way contractual
  • the benefit must not be cash or a cash voucher

You are now asking “Can directors/shareholders in their own company enjoy trivial benefits themselves?”

Yes they can but the new rules impose an exemption limit of £300 if such benefits are provided to a director or “office-holder” of a close* company or to members of their family/household.

* “close” = 5 or fewer shareholders/participators

Maybe get your company to fund your Christmas meal or summer outing? Could do but make sure all rules are followed so HMRC cannot challenge.

As always – discuss with us if you want more advice  but, whatever your plans, we wish you all the best of times in this festive season.


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