Trivial Benefits

It is a general rule that if you are provided something in connection with your employment, then this is subject to tax and National Insurance under the Benefit in Kind rules. This is because the provision of such benefits is considered a non-cash form of salary.

However, there is an exemption for small benefits. Known as Trivial Benefits, these do not have to be reported to HMRC and no tax and National Insurance will be due on them. To qualify for this treatment, the benefit must meet the following four criteria.

• It costs £50 or less to provide
• It isn’t cash or a cash voucher (gift vouchers not exchangeable for cash are fine)
• It isn’t a reward for work or performance
• It is not required to be provided by the employment contract

This means that you can take out a group of employees for a meal to celebrate a birthday or send flowers to congratulate an employee on their new baby. You can also give staff Christmas presents, including alcohol and chocolate, without any issues provided they do not breach the £50 limit.

If you need assistance with dealing with these or the tax and National Insurance issues around more typical benefits, please get in touch.