Trivial benefits – to tax or not to tax?

Date posted: 15th Nov 2023

The trivial benefits legislation came into force on 6 April 2016 and allows employers to provide trivial benefits to employees without the employee incurring tax liabilities.

However, for the benefit to qualify as trivial, a number of conditions must be met which are that:

  • The benefit is not cash or a cash voucher.
  • The benefit is not provided under salary sacrifice arrangements or other contractual obligations.
  • The benefit is not provided in recognition of services performed by the employee in the course of the employment or in anticipation of such services.
  • The cost of the benefit does not exceed £50.

A lot of business owners may jump straight to the final point. However, all four points must be met. So if the reward was in recognition of the employee’s performance, it would be a taxable benefit, even if less than £50, as the third point is not met. In that instance, the benefit was provided in recognition of services.

The exemption is there to avoid taxing genuine gifts – say on an employee’s marriage or a Christmas gift.

The exemption is reduced for directors and capped at £300 per annum.

If you have any queries regarding trivial benefits, please give us a call.


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