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Trivial benefits – Not so trivial

Trivial benefits can now be given to employees (including directors) tax free. This is a great tax free perk to give employees, as long as the following conditions are met:

  • the benefit must not be cash or a voucher exchangeable for cash

  • it can’t be used in conjunction with relevant salary sacrifice arrangements or any other contractual obligation

  • it must not be provided in recognition of particular services performed or anticipated in the course of the employment.

So what will qualify

A trivial benefit will qualify for exemption if the qualifying gift is in recognition of a life event such as the employee’s birthday, wedding or new baby.

Non-cash vouchers can be trivial benefits if they meet all the relevant conditions. This means that you could give your employees high street retail vouchers of up to £50 as, for example, a birthday or Christmas present, and these would be exempt.

There is an upper limit of £50 on each benefit that qualifies for the exemption but not on the total trivial benefits given to any employee in a tax year, apart from directors where this is capped at £300 in one tax year.

Payment of trivial benefits to employees and directors is a great way to incentivise staff and maintain morale.

If you would like to discuss trivial benefits in more detail, then don’t hesitate to contact Jane or Jamie at Townend English on 01759 305 989

James Foxton FCA 16th March 2018

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