Tax Free Company Benefits
Posted on 9th September 2020 at 11:07
Tax Exempt Gifts - Trivial Benefits
What are trivial benefits? As per the HMRC’s guidance, here are some examples:
• taking a group of employees out for a meal to celebrate a birthday
• buying each employee a Christmas present or birthday present
• flowers on the birth of a new baby
• a summer garden party for employees
How much can a business gift to its employees and directors?
• An employee can receive multiple trivial benefits throughout the year, as long as each one does not exceed £50.
• However, the exemption for directors is capped at total cost of £300 in the tax year. Therefore up to 6 gifts each costing up to £50 each tax year.
Remember, the rules are:
• Cost of the benefit must not be over £50;
• The benefit must not be in the form of cash or a voucher redeemable for cash;
• The benefit must not be provided as part of salary sacrifice arrangements or any other contractual obligation including any legitimate expectation.
• The benefit must not be provided in recognition of particular services.
• If any of these conditions are not satisfied then the benefit is taxed in the normal way – via a P11D.
• Also, if the cost of the benefit exceeds £50, the whole amount will be taxable rather than just the excess.
You don’t even need to declare it to HMRC so why not treat yourself or your employees with a gift!
If you provide trivial benefits and require assistance or tax advice, please contact a member of our team on 0333 772 7753 or email [email protected]
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