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Business Acumen - 15-12-2022 - - 0 comments
Trivial Benefits

Employers can now provide trivial benefits such as small gifts and entertainment without having to include these within PAYE settlement agreements or disclose on P11D forms. Previously, trivial benefits would cover the provision of tea and coffee whilst at work and small seasonal gifts, such as a turkey for Christmas. These rules introduced in 2016 allow some more flexibility however there are some small changes you need to be aware of, to make sure you don't get stung! 

The Conditions

The following conditions must be adhered to be able to provide tax-free trivial benefits.

The benefit must not:

  • Exceed £50 (this applies to each time you provide a trivial benefit) 
  • Be a cash payment (gift vouchers are allowed, providing they can't be exchanged for cash)
  • Be part of any contractual obligation 
  • Pay for services that are performed as part of regular employment duties 

Be careful - not to spend one penny more than £50, otherwise the full value of the benefit will be taxable. This is also not a round sum allowance. You do need to incur a cost and claim the receipted amount, so you can't just claim the full £300 at the end of the year. 

Trivial Benefits for Directors

If you are a director then you will still be able to receive trivial benefits, as well as providing these to family members. Please bear in mind of the above conditions, as these will all still apply. As a director, there is an annual cap of £300. If you do provide trivial benefits to other family members who are not employees or directors, these will be included as part of your directors' allowance for the year. 

Examples of What You Can Do to Treat Yourself and Your Employees

Providing it's not cash, the gift itself could be anything, providing the cost is below £50 per head. For example, store gift cards, flowers, chocolates, wine, hampers or even taking staff out for a meal. These trivial benefits are in addition to the annual staff entertaining allowance of up to £150 per annum, (Christmas or Summer party allowance). 

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