Since 2016 there has been no charge to tax and NIC on “trivial” benefits provided to an employee. This means that these do not need to be shown as a benefit on a form P11D but are still tax deductible in the company accounts.
What is a trivial benefit?
It’s a gift to an employee, not linked to their duties. For example a bunch of flowers, a candle, office ice creams on a sunny day, gift vouchers on their birthday etc.
The rules state:
- the cost must not exceed £50 (or £50 per person in the case of a benefit provided to several employees at once);
- the benefit must not consist of cash or a credit token (including the use of a credit card);
- there should be no salary sacrifice involved; and
- provision of the benefit can not be linked to any particular services provided by the employee.
- There is no limit to the number of trivial benefits allowed to staff in the year.
- However, in the case of directors and their family members the trivial benefits are capped at £300 per year.
An example could be buying an employee a gift around the time of their birthday, sending an employee flowers to celebrate an event, giving a gift voucher to show appreciation to a member of staff.
Happy Birthday, Happy Easter, Happy Christmas, Happy Friday, Happy Valentines, Happy Halloween!
Remember if you are the director of your own limited company and you receive a salary via the company payroll then you are also an employee and therefore are entitled to receive trivial benefits from your company.
These are capped at £300 per year, however you could ‘gift’ yourself a John Lewis or Amazon voucher six times throughout the year to enjoy this tax free perk!