What are trivial benefits? An explanation of the staff benefits you can give without incurring tax. From April 2016, legislation was introduced providing clarity as to what small benefits are deemed to be trivial and therefore exempt from tax and reporting obligations.
Conditions to be satisfied
- the cost of providing the benefit cannot exceed £50 per employee (including VAT), or the average cost per employee if provided to a group of employees and it is impracticable to work out the exact cost;
- the benefit is not cash or a cash voucher (but gift cards would qualify as long as they are not exchangeable for cash);
- the employee is not entitled to the benefit as part of any contractual obligation (including under salary sacrifice arrangements);
- the benefit is not provided in recognition of particular services performed (or in anticipation of such services) or as part of their normal employment duties.
If any of these conditions are not satisfied then the benefit is taxed in the normal way – via a P11D, PSA or taxed through the payroll. Also, if the cost of the benefit exceeds £50, the whole amount will be taxable rather than just the excess.