Here’s a little perk that employers should be aware of – Trivial Benefits.

by | Feb 14, 2024

For employers, navigating the world of employee benefits can be tricky. You want to keep your team happy and motivated, but tax implications can make things confusing. Thankfully, HMRC offers a little perk called “trivial benefits”, these can be Vouchers There’s in no tax or NI for employees or employers, and the cost of purchasing vouchers is treated as an expense for corporation tax purposes, win-win situation. Just keep it small, spontaneous, and well-documented, and watch your employees’ smiles, and productivity flourish! But there are specific criteria that needs to be met:

  • the cost of providing the benefit does not exceed £50 at a time (note that vouchers cannot be issued all at once i.e. 6 X £50). If there is a delivery cost, it needs to be included in £50.
  • the benefit is not cash or a cash voucher e.g. Amazon voucher or alike, which are exchanged for goods, are good since they’re not exchanged for cash.
  • the employee is not entitled to the benefit as part of their employment conditions.
  • the employer does not provide the benefit in recognition of services provided by the employee e.g. benefits provided in recognition of services provided such as long service awards and social events as a team-building event or as a ‘thank-you’ for good results in the year will not qualify as trivial benefits.
  • where the employer is a close company, trivial benefits provided to a director, office holder or to a member of their family (all need to be on payroll) are capped at £300 per year per person (subject to the £50 cap on each individual benefit).
  • where VAT applies, the £50 cap applies to the VAT-inclusive amount.
  • in our opinion, to avoid HMRC seeing vouchers as part of a remuneration package, issuance of vouchers needs to be spread throughout the year and not following a set timely interval.

Trivial benefits are a great way to show appreciation, boost morale, and stay tax compliant. Use them wisely, and you’ll have a happy and motivated team!

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