Tax on trivial benefits
You don鈥檛 have to pay tax on a benefit for your employee if all of the following apply:
- it cost you 拢50 or less to provide
- it isn鈥檛 cash or a cash voucher
- it isn鈥檛 a reward for their work or performance
- it isn鈥檛 in the terms of their contract
This is known as a 鈥榯rivial benefit鈥�. You don鈥檛 need to pay tax or National Insurance or let HM Revenue and Customs (HMRC) know.
You have to pay tax on any benefits that don鈥檛 meet all these criteria.
If you鈥檙e not sure whether a benefit counts as a trivial benefit call the employer helpline.
Salary sacrifice arrangements
If you provide trivial benefits as part of a salary sacrifice arrangement they won鈥檛 be exempt. You鈥檒l need to report on form P11D whichever amount is higher:
- the salary given up
- how much you paid for the trivial benefits
These rules don鈥檛 apply to arrangements made before 6 April 2017 - check when the rules will change.
Directors of 鈥榗lose鈥� companies
You can鈥檛 receive trivial benefits worth more than 拢300 in a tax year if you鈥檙e the director of a 鈥榗lose鈥� company.
A close company is a limited company that鈥檚 run by 5 or fewer shareholders.