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Trivial Benefits - potentially simplification

An employer can now provide “trivial” benefits such as a bunch of flowers, a box of chocolates, or a meal out, without having to put the cost on the P11D and without any tax or national insurance for either the employer or employee.  The employer will also be entitled to claim tax relief on the cost.

There are three key conditions for the relief:

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

Theoretically there is no limit on the number of trivial benefits that an employer can provide so an employee could potentially receive up to £12,500 a year of tax-free benefits, a £50 benefit for every working day.  In practice this is likely to be challenged as a reward for services.

Directors can also receive the tax exemption trivial benefits but subject to an annual cap of £300 on exempt benefits provided to the director or members of their family who are also employees of the company.

 

 

Date: 22nd November, 2016
Author: Cathy Corns

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