What are Trivial Benefits?

What are trivial benefits?

Trivial benefits are small tax-free gifts given to employees.

As mentioned previously, while they are just small gestures, these small treats are great for creating happier employees who feel appreciated, which can make them more likely to work that bit harder, increase loyalty and make them want to stay working for the company longer.

Unlike some other benefits, these do not attract tax or National Insurance (NI) contributions and you won’t need to notify HMRC about them; just as long as you adhere to the trivial benefits criteria.

Trivial benefit rules

In order for an employee gift to count as a trivial benefit, all of the following will need to apply:

• It cannot cost you more than £50
• It cannot be cash or a cash voucher
• It mustn’t be a reward for their work
• it isn’t included in their contract

If the gifts do not meet the criteria then they will be subject to tax, and you would need to report them to HMRC via a P11D form.

You can read more about this on our What is a P11D? page.

Examples of a trivial benefit include:

• Small token gifts, like chocolate or wine
• A birthday present for an employee
• Lunch in the office, like pizza for example
• Evening drinks after work

They must not be confused with benefits in kind, which are taxable and would require a P11D form.

Examples of benefits in kind include:

• Any private healthcare provided
• Health insurance
• A company car
• Life insurance
• Personal use of a company asset, such as a computer

If you have an agreement with an employee whereby you provide trivial benefits as part of a salary sacrifice arrangement, then this will also be subject to tax (and you’ll need to report it on a P11D)

Another point to highlight is if you are a director of a ‘close’ company – a limited company run by five or less shareholders; those in this situation cannot receive more than £300 in a tax year in trivial benefits.

We hope you found this page helpful. Our team of experts are available to answer any questions you may have, so either contact us via online chat, call us on 01442 795 100 or email sophie.lewis@dolanaccountancy.com.