Trivial Benefits

It’s Time for Some Trivial Benefits!

What Are Trivial Benefits?

Trivial benefits are exactly how they sound – small little benefits you can pass on to your team as thanks for getting through another covid restriction deadline, or to boost morale on a Friday night.  They include little touches, like sending a bunch of flowers to a team member who has just welcomed a new baby, a pizza takeaway to aid a bonding session or even a turkey at Christmas!  We think that last one might be a little bit old fashioned, but you get the picture!  

As with all benefits and taxes, it’s important to get it right to keep HMRC happy.  Here are the most important things you need to know about trivial benefits and how you can utilise them.

Key Points to Remember

• Price Cap – There’s a price cap on trivial benefits on a per employee basis.  This is currently £50 per ‘gift’ with an annual total of £300.  Remember, gifts must be counted at their market value, not how much was actually paid for them. 

• It Can’t be Cash – A gift in the shape of cash may be construed as a form of payment. Therefore it’s not allowed for this benefit.

• Not to be Confused with Bonus – Again, this comes too close to be constituting a form of payment.  A trivial benefit must always be given out of generosity for random reasons!  Not because a work goal was achieved, or a contract was confirmed.

• It Is Not Covered in Staff Contracts – See the point about bonus’ above.  These benefits are random and therefore could not be covered in any contract.  That would make them a bonus or other kind of payment.

What About Company Directors?

Sometimes company directors need a little bit of motivation too, so directors and other office holders within a close company (that means a limited company with five or fewer shareholders) also have an annual cap of £300 for trivial benefits. Directors can also use their annual allowance to provide trivial benefits to family members.

Stay Inside the Rules

If you decide to start using your trivial benefit allowance on your staff (and why not?) then make sure you do it correctly, so you don’t get into trouble with HMRC.  Make sure you follow the rules above carefully and keep receipts and records to make sure you don’t overstep allowances.  They can allow for that perfect little boost to morale your team needs after a hard year, and we can all relate to that!You can find out more about Trivial Benefits at HMRC and don’t forget you can always get in touch with us if you have any questions.