27 Oct

New Exemption for Trivial Benefits

New Exemption for Trivial Benefits

An employer can now provide trivial benefits to employees, these do not need to be declared on a P11D and there are no tax or national insurance consequences for the employer or employee.

These trivial benefits include:

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A bottle of Champagne!

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A bunch of flowers!

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A meal out!


Limits to gifts?

There are no limits to the number of such gifts that you can give to your staff, however, if excess this may start to look like reward for services and then be caught by the rules.

You could consider buying gift cards, as long as they do not exceed £50 and are not convertible to cash (ie no change) they would be allowable.

There are conditions:

  • The gift must not exceed £50
  • The gift must not be a reward for services
  • The gift must not be contractual
  • The gift cannot be cash or a cash voucher
  • The recipient must be on the payroll

What about directors?

The good news is that directors can take advantage of this new exemption too although there is a annual cap of £300 for directors and their family per tax year.


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Examples from HMRC draft guidance:

Example A

Employer A takes a group of employees out for a meal to celebrate a number of birthdays.

Five employees attend the meal at a total cost to the employer of £240. Individual employees make different menu and drink selections. Rather than undertake a detailed analysis of the bill you should accept that the cost per head is £48, reflecting an average of £240/5. The benefit of the meal can be covered by the exemption since the cost for each individual does not exceed the trivial benefit financial limit.

Example D

Employer D provides each of its employees with a bottle of wine costing £25 at Christmas.

However, as an alternative, it provides employees who do not drink alcohol with a £25 gift vouchers for a national supermarket chain which they can exchange for an alternative non-alcoholic Christmas gift. Both the bottle of wine and the non-cash gift voucher can be covered by the exemption. Cash and cash vouchers would not be exempt.


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